Informist, Friday, Aug 5, 2022
By Vivek Kumar
MUMBAI – Benchmark equity indices were little changed today, as the Reserve Bank of India's monetary policy was along expected lines and comments by central bank officials were relatively less hawkish. However, some caution prevailed among foreign institutional investors ahead of the release of crucial data on employment in the US.
The RBI's Monetary Policy Committee unanimously decided to raise the repo rate by 50 basis points to 5.4% and the central bank kept retained its growth and inflation projections for this financial year, all in line with market expectations.
RBI's CPI inflation projection for 2022-23 (Apr-Mar) is at 6.7%.
"Between the last policy and this policy, the challenges to inflation have reduced significantly. If this trend continues, there is a possibility that inflation can actually be lower than what is currently projected," said Pawan Parakh, fund manager at Renaissance Investment Managers.
From an equity market perspective, this was very much a status quo kind of policy, Parakh said.
With the policy decisions already factored in, the benchmark indices were little changed. The benchmark Nifty 50 ended 0.1% higher at 17397.50 points and the Sensex rose 0.2% to close at 58387.93 points.
RBI Governor Shaktikanta Das said that the rate-setting committee would remain focussed on withdrawal of accommodation, as inflation was still above its tolerance band of 2-6%.
A few analysts had expected the central bank to change its policy stance to 'neutral', as prices of key commodities have come sharply off highs, indicating that inflation is likely to have peaked. While the RBI echoed the view on inflation, it maintained its stance of 'withdrawal of accommodation'.
It is difficult to say at what level of rates the MPC will pause, Das said at a post-policy press conference. Both inflation and growth dynamics would be key in determining policy moves going ahead, he added.
"We think we are near peak RBI-hawkishness, led by falling risk premia of the entire commodity price complex, and the incremental rate hikes will be lower," said Madhavi Arora, lead economist at Emkay Global Financial Services. The tone of the central bank was balanced, she said.
Caution ahead of data on employment in the US in July also helped keep benchmark indices in a thin range. The growth in jobs in the US is likely to have moderated in July, as per analysts.
The data will be released later today, and ahead of that, futures contracts of benchmark US indices were flat.
SECTORS & STOCKS
Among key sectors, the Nifty Bank index ended 0.4% higher at 37920.60 points amid the focus on the RBI policy.
Meanwhile, the Nifty IT index rose 0.6%, and was among the top sectoral gainers.
Stock-specific action continued, with companies reporting their quarterly earnings. Shares of Mahindra & Mahindra, Alembic Pharmaceuticals, Welspun Corp and Balkrishna Industries ended 2-7% lower, following disappointing earnings. On the other hand, Fertilizers & Chemicals Travancore and Manappuram Finance rose over 5% and 6%, respectively, as these companies posted strong earnings.
* Among Nifty 50 stocks, 28 rose and 22 fell
* Among Sensex stocks, 17 rose and 13 fell
* On the BSE, 1,864 stocks rose, 1,484 fell, and 161 were unchanged
* Nifty FMCG: Up 0.2%; Nifty Auto: Down 1.1%; Nifty Energy: Down 1.4%
BSE National Stock Exchange
Sensex: 58387.93 points, up 89.13 pts (0.2%) Nifty 50: 17397.50, up 15.50 pts (0.1%)
S&P BSE Sensitive Index Nifty 50
Lifetime High: 62245.43 (Oct 19, 2021) : Lifetime High: 18604.45 (Oct 19, 2021)
Record Close High: 61765.59 (Oct 18, 2021) : Record Close High: 18477.05 (Oct 18, 2021)
2022 1st day close: 59183.22 (Jan 3) : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 61308.91 (Jan 17) : 2022 Closing High: 18308.10 (Jan 17)
2022 Closing Low: 51360.42 (Jun 17) : 2022 Closing Low: 15293.50 (Jun 17)
2022 High (intraday): 61385.48 (Jan 17) : 2022 High (intraday): 18321.55 (Jan 17)
2022 Low (intraday): 50921.22 (Jun 17) : 2022 Low (intraday): 15183.40 (Jun 17)
2021 Closing High: 61305.95 (Oct 14) : 2021 Closing High: 18338.55 (Oct 14)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14) : 2021 High (intraday): 18350.75 (Oct 14)
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)
End
Edited by Avishek Dutta
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