Informist, Friday, Oct 8, 2021
By Ankika Biswas
MUMBAI – Domestic equities continued their upward trajectory today as the Reserve Bank of India stood by its accommodative stance, and strong business updates by companies for Jul-Sep kept bulls active in the market. Not only large-cap stocks, but even the mid-cap and small-cap ones witnessed strong buying interest.
Retaining its dovish stance, the apex bank kept the key repo and reverse repo rates unchanged. However, addressing the downside risks to economic growth, it adopted a patient approach towards managing liquidity by suspending its bond buying programme and further increasing the limit of the variable reverse repo rate window.
The central bank acknowledged that the recovery of demand has gained traction and expects it improve further with the festival season. Its growth projection stood firm at 9.5% for the current financial year, led by early signs of recovery across all sectors of the economy amid a rapid pace of mass COVID-19 vaccinations.
Taking note of easing food prices and a favourable base effect, the apex bank slashed its CPI projections to 5.3% from 5.7% earlier for 2021-22 (Apr-Mar).
However, most brokerages are now flagging the possibility that the RBI will hike the reverse repo rate in its December policy review itself.
“We believe that the next step in policy normalization would be narrowing of the policy rate corridor through a reverse repo hike in the Dec policy review,” Morgan Stanley said in a report. “As such, we expect reverse repo hikes in Dec and Feb review, which will help to narrow the corridor back to pre-pandemic levels.”
With concerns over a likely shift in RBI’s stance on maintaining its loose monetary policy out of the way, market participants believe that focus will now move to the earnings season, which will lead to stock-specific action. Tata Consultancy Services will kick-start the earnings season for frontline companies later today.
Today, the Nifty 50 closed 0.6% higher at 17895.20 points after touching an intraday high of 17941.85 points. Similarly, the Sensex ended 0.6% higher at 60059.06 points after testing a high of 60212.30 points during the day.
Yet again, domestic headline indices outperformed most of their Asian peers, with those in Singapore and Hong Kong closing 0.4% and 0.5% higher, while indices in Taiwan and South Korea ended lower.
“With liquidity and inflation concerns taking a back-seat, strong business updates so far and Moody’s upgradation of India’s outlook, Indian equities may continue to outperform their emerging market peers and may see the headline Nifty 50 touching the 18000-point mark anytime now,” said Ambareesh Baliga, an independent market analyst.
Today, gains were led by shares of index heavyweight Reliance Industries, as well as the automobile and information technology sectors.
Shares of RIL closed 4% higher after touching a record high during the day due to renewed buying interest amid positive outlook for the telecom and retail businesses. With today’s gains, it has become the first Indian company to touch a market capitalisation of 18 trln rupees.
Further, expectations of robust Jul-Sep earnings and positive revenue growth outlook kept buying in information technology stocks intact today. Gains in all of its constituents saw the Nifty IT close nearly 2% higher at 36402 points, while shares of TCS closed 1% higher at 3,935.65 rupees after hitting a lifetime high.
While the RBI’s positive commentary on economic recovery and a cut in inflation estimates buoyed overall market sentiment, banks failed to hold on to gains. Nifty Bank underperformed Nifty 50 and ended 0.06% up at 37775.25 points.
Meanwhile, pharmaceutical and fast-moving consumer goods bore the brunt of the selling pressure.
* Among Nifty 50 stocks, 23 rose and 27 fell
* Among Sensex stocks, 13 rose and 17 fell
* On the NSE, 1,059 stocks rose, 910 fell and 86 were unchanged
* On the BSE, 1,847 stocks rose, 1,458 fell and 148 were unchanged
* Nifty IT: Up 1.96%; Nifty Bank: Up 0.06%; Nifty FMCG: Down 0.6%
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BSE National Stock Exchange
Sensex: 60059.06, up 381.23 pts (0.6%) Nifty 50: 17895.20, up 104.85 pts (0.6%)
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S&P BSE Sensitive Index Nifty 50
Lifetime High: 60412.32 (Sep 27) : Lifetime High: 17947.65 (Sep 24)
Record Close High: 60077.88 (Sep 27) : Record Close High: 17855.10 (Sep 27)
2021 1st day close: 47868.98 (Jan 1) : 2021 1st day close: 14018.5 (Jan 1)
2021 Closing High: 60077.88 (Sep 27) : 2021 Closing High: 17855.10 (Sep 27)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 60412.32 (Sep 27) : 2021 High (intraday): 17947.65 (Sep 24)
2021 Low (intraday): 46160.46 (Jan 29) : 2021 Low (intraday): 13596.75 (Jan 29)
2020 Closing High: 47751.33 (Dec 31) : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23) : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31) : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24) : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20) : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19) : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28)) : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23) : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26) : 2017 High(intraday): 10515.10 (Dec 26)
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End
Edited by Snigdha Kuttikat
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