The domestic equity benchmarks ended with strong gains on Wednesday, led by banks shares. The Nifty ended above the 14,800 mark. Shares climbed after the RBI kept policy rates unchanged but committed to a massive government bond purchase programme. All the sectoral indices on the NSE ended in the green.
The barometer index, the S&P BSE Sensex, advanced 460.37 points or 0.94% to 49,661.76. The Nifty 50 index added 135.55 points or 0.92% to 14,819.05.
In the broader market, the BSE Mid-Cap index rose 0.82% and the BSE Small-Cap index gained 1.30%.
The market breadth was strong. On the BSE, 1,837 shares rose and 1,111 shares fell. A total of 184 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 13,24,47,475 with 28,73,334 deaths. India reported 8,43,473 active cases of COVID-19 infection and 1,66,177 deaths while 1,17,92,135 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
India detected 115,736 new cases of the novel coronavirus on Tuesday, the highest daily increase so far. Nearly 55,000 cases were detected in Maharashtra, while Chhattisgarh scaled a new peak of 9,921 cases. Karnataka, Uttar Pradesh and Delhi reported more than 5,000 cases each.
RBI Policy Outcome:
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), announcing its first bi-monthly monetary policy of the 2021-22 fiscal today, voted to leave policy repo rate unchanged at 4%. MPC maintained accommodative stance in unanimous vote.
RBI Governor Shaktikanta Das said that the CPI inflation trajectory is likely to be subject to both upside and downside pressures. The central banker added that the projection for CPI inflation has been revised to 5% in Q4 of financial year 2020-21, 5% in Q1 FY22, 5.2% in Q2, 4.4% in Q3 and 5.1% in Q4 with risks broadly balanced.
While the RBI maintained its FY22 real GDP growth projection at 10.5%, the RBI Governor said that the recent surge in COVID-19 infections has given greater uncertainty on growth outlook.
In an endeavour to sustain congenial financing conditions, the RBI has decided to put in place a secondary market G-sec acquisition programme (G-SAP). The central bank has decided to announce a G-SAP of Rs 1 lakh crore in Q1FY22.
The RBI also extended the deadline for TLTRO on-tap liquidity scheme to 30 September 2021 from 31 March 2021. It has also decided to conduct such auctions of longer tenors, following the success of variable reverse repo rate auctions. The amount and the tenor of these auction will be announced later by the RBI.
The central bank will provide liquidity support of Rs 50,000 crore to all-India financial institutions and it has also proposed to constitute a committee to comprehensively review the functioning of asset reconstruction companies.
The RBI has decided to accept the recommendations of an advisory committee that reviewed ways and means advance limits to states and union territories. The aggregate ways and means advance limit of all states and UTs will be enhanced to Rs 47,010 crore, an increase of 46%.
Economy:
The International Monetary Fund (IMF) has upgraded its growth projection for India to 12.5% for the Financial Year 2021-22. In its latest World Economic Outlook report, the IMF has pegged India's GDP to grow 1% higher than its previous report published in January this year.
The Washington based International Financial Institution has projected a contraction of 8% in the growth in the last fiscal while it has forecasted a growth of 6.9% in the next financial year beginning in 2022. The IMF has also said that inflation will taper down to 4.9% in the current financial year.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.083% as compared with 6.122% at close in the previous trading session.
In the foreign exchange market, the rupee tumbled against the dollar. The partially convertible rupee was hovering at 74.4775, compared with its close of 73.42 during the previous trading session.
MCX Gold futures for 4 June 2021 settlement rose 0.83% to Rs 46,300.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.10% to 92.25.
In the commodities market, Brent crude for June 2021 settlement rose 59 cents at $63.33 a barrel. The contract rose 59 cents, or 0.95% to settle at $62.74 a barrel in the previous trading session.
Foreign Markets:
Most shares in Europe and Asia advanced on Wednesday. US stocks fell from record levels on Tuesday as the recent rally driven by signs of strong economic rebound took a pause.
On Tuesday, California Governor Gavin Newsom said that the state will reopen its economy by June 15 provided that coronavirus vaccine and hospitalization cases remain stable.
The IMF on Tuesday projected an impressive 12.5% growth rate for India in 2021, stronger than that of China, the only major economy to have a positive growth rate last year during the COVID-19 pandemic. The Indian economy is expected to grow by 6.9% in 2022.
The IMF revised up its forecast for the world economy. On Tuesday, the organization said it expects growth at 6% in 2021, up from a January prediction of 5.5%, and Chief Economist Gita Gopinath said that despite lingering uncertainties around the pandemic, a way out of this health and economic crisis is increasingly visible.
Buzzing Segment:
The Nifty Bank index rose 1.51% to 32,991.20. The index fell 4.01% in the past two sessions.
Bandhan Bank, Federal Bank, SBI, Indusind Bank, ICICI Bank, RBL Bank, PNB, Axis Bank, Kotak Mahindra Bank, AU Small Finance Bank and HDFC Bank rose by 0.49% to 3.35%.
IDFC First Bank rose 4.16% after the bank successfully raised about Rs 3000 crore through qualified institutional placement (QIP) route. The capital raising committee of board of directors of the bank, at their meeting held on Tuesday (6 April 2021) approved allotment of 52.31 crore shares to eligible qualified institutional buyers at the issue price of Rs 57.35 per equity share. The QIP issue opened on 30 March 2021 and closed on 6 April 2021.
Separately, the IDFC First Bank informed that the bank's total customer deposits increased 43.15% to Rs 82,628 crore as on 31 March 2021 as against Rs 57,719 crore as on 31 March 2020. CASA deposits of the bank improved 122.74% to Rs 46,022 crore at the end of 31 March 2021 from Rs 20,661 crore on 31 March 2020. CASA ratio improved to 51.95% on 31 March 2021 from 48.31% in 31 December 2020 and 31.87% as on 31 March 2020.
Stocks in Spotlight:
Titan Company shed 0.78%. The company said it recorded very strong revenues in Q4 March 2021. The company recorded a revenue growth of 60% for the overall Q4 due to low base of March 2020, with revenue growth of over 36% in the comparable January & February months. Q4 reported revenue growth was further aided by a large B2B gold coin order that contributed about 8% of the growth.
Cholamandalam Investment and Finance Company jumped 7.14%. The company announced that it is one of the companies participating in a consortium of Vishwakarma Payments, that has applied for a new umbrella entity license for retail payments with RBI.
Dixon Technologies (India) rose 4.20%. The company and Bharti Enterprises have signed MoU to form a joint venture (JV) company to apply for Government of India's production linked incentive (PLI) scheme for manufacturing telecom & networking products.
Tata Steel gained 1.38% after the steel major reported its highest ever annual deliveries despite COVID-19 driven disruption. Tata Steel India achieved highest ever quarterly crude steel production of 4.75 million tons with a 3% quarter on quarter growth for Q4 FY21 over Q3 FY21. The crude steel production rose 0.42% year on year from 4.73 million tonnes posted in Q4 FY20. During the quarter, steel production at Tata Steel Europe increased to 2.65 million tons. Steel sales volume rose by 18% quarter on quarter and 4% year on year.
Equitas Small Finance Bank fell 2.64%. The bank's total deposits jumped 52% year-on-year (YoY) to Rs 16,391 crore while its gross advances grew by 16% YoY to Rs 17,896 crore in the quarter ended on 31 March 2021 compared with the same period last year.
RailTel Corporation of India added 0.77%. The company bagged an order worth to Rs 22.38 crore from Controller General of Defence Accounts for setting up network operation centre. It also received order amounting to Rs 11.99 crore from Axom Sabra Siksha Abhiyan Mission for deployment of artificial intelligence-based identification system for capturing attendance and management of SDMIS.
GRM Overseas hit an upper circuit of 5% at Rs 1950.90 after the company said its subsidiary, GRM Foodkraft, has entered into an agreement with Walmart to place its products in Walmart stores.
New Listing:
Shares of Barbeque-Nation Hospitality settled at Rs 590.40 on the BSE, a premium of 18.08% over the initial public offer (IPO) price of Rs 500.
The stock was listed at Rs 492, a discount of 1.6% to the IPO price. The stock hit a high of Rs 590.40 and low of Rs 481.35. On the BSE, 8.98 lakh shares were traded on the counter.
The initial public offer (IPO) of Barbeque Nation Hospitality was subscribed 5.98 times. The issue opened for bidding on 24 March 2021, and closed on 26 March 2021. The price band for the IPO was set at Rs 498-500 per share.
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