On account of RBI monetary decision to cut the Repo Rate by 0.25 per cent to 6.25 per cent the Indian indices took a beating after on Thursday. After gaining near 250 points in morning session the BSE Sensex lost near 200 points and tested the 37,052 levels again while the 50-stok Nifty lost near 40 points to 11,082 levels. BSE PSU and S&P CPSE sectors were the top performers in early trading session. Ahead of RBI monetary meeting, the Nifty Bank index rose near 0.26 per cent to 27,475 levels. Banking major Yes Bank went up by around 2.25 per cent, Federal Bank surge by near 1.9 per cent, SBI stock rose by near 1.4 per cent, City Union Bank shares rose by around 1.16 per cent while Axis Bank had a minor bull run of near 0.9 per cent. Shares of bank of Baroda and ICICI Bank too went up by more than half a per cent.
Dharmesh Kant, Head – Retail Research, IndiaNivesh Securities Ltd told, “It is a bipolar market where the main index has gained but bulk of the stocks remain in negative territory. The uncertainty around elections, concerns regarding leveraged companies and possible debt defaults is dragging down the broader market. The flows from global exchange-traded funds, which typically deploy cash in few heavyweights in times of uncertainty. Foreigners have bought a net $144 million shares this month after withdrawing $75 million in January. The market may begin to broaden now that the Nifty has reclaimed the key psychological level of 11,000.”
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Energy stocks rally post RBI policy decision
After the RBI decision to cut Repo Rates by 25 bps to 6.25 per cent, the BSE Sensex and Nifty doesn’t react too much and witnessed some profit booking but in the meantime energy stocks extended their margin. Hindustan Oil Exploration Company gained by over 2.8 per cent, Selan Exploration Tech surge near 3 per cent, Panama Petrochem went up by 2.66 per cent. But, the energy major and Sensex heavy weight Reliance Industries extened its losses up to 1.3 per cent.
Marker experts reacts to RBI rate cut stance
Dharmesh Kant, Head – Retail Research, IndiaNivesh Securities Ltd told, “Rate cut of 25 basis points is an act of fine balance between maintaining real income and boosting economic growth being inflation trajectory and low private capex were key enablers for rate cut, which is good for mid and small cap companies. Double bonanza for NBFC’s low cost of funds and boost in consumption on account of low inflation / high disposal income. What interim Budget 2019 missed for corporates has been largely compensated by the Monetary policy change in stance to neutral will bring stability to financial environment.”
Key take away from RBI Repo Rate cut:
Bond market to get more liquidity;
Equity markets to scale further;
More liquidity may put pressure on Indian rupee against the US dollar;
Chances of rise in inflation can’t be ignored as more liquidity would fuel demand;
Good news for home buyers as rate cut would increase liquidity for banking transactions; and
Banking sector can have a sigh of relief as bad loans have hit their merchandise to a larger extent
11: 47 AM
RBI cuts Repo Rate by 25 bps
The Reserve Bank of India has cut the repo rate by 0.25 per cent to 6.25 per cent that may fuel the bond market and the equity market in India.
BANKEX surge on RBI Monetary meet
Ahead of RBI monetary meeting, the Nifty Bank index rose near 0.26 per cent to 27,475 levels. Banking major Yes Bank went up by around 2.25 per cent, Federal Bank surge by near 1.9 per cent, SBI stock rose by near 1.4 per cent, City Union Bank shares rose by around 1.16 per cent while Axis Bank had a minor bull run of near 0.9 per cent. Shares of bank of Baroda and ICICI Bank too went up by more than half a per cent.
Auto stocks catching the market rally
Fuelled by the market rise, auto stoks are taking leap at faster rates. Auto major TVS Motors company surged by more than 4 per cent, shares of Tata Motor jump by near 2.75 per cent, Hero MotoCorp rose by nera 2 per cent, Bharat Forge rise by more than 2.5 per cent, Apollo Tyres stok rose by more than 3.5 per cent while Bajaj Auto and Ashok Leyland counters surge by more than 3 per cent.
Toss before RBI Monetary meeting
Anindya Banerjee, Deputy Vice President, Kotak Securities told Zee Business Online, “If the RBI lowers interest rates, it can knock down the Rupee. That is a risk worth taking as anyways the Rupee in 2019 is not responding to high real rates, as inflows are lacking. If RBI can lower rates by 25 bps and keep the option open for another 25 bps in April, it can juice up the bond market and also rate sensitive stocks.”
Buy GAIL for 30% gains, advises Narnolia Financial Advisors
Gail is gradually shifting from Gorgon volumes to US LNG. The company has received 58 LNG cargoes in 9 months of FY19 out of which it has sold 31 cargoes in international market. Company has gained significant marketing margins in trading US LNG in the last two quarters and management expects margins to be remained at almost same level in Q4 FY19. Company has taken hedges to secure its margins for at least one more quarter.
On suggestion for investors in regard to GAIL counter Aditya Gupta, Research Analyst at Narnolia Financial Advisors informed Zee Business online in a detailed research citing, “The fundamental of the counter is indicating strong upside potential for 30 per cent. An investor can buy the stock for target price of Rs 433 per share.” The counter is currently oscillating around Rs 333 per stock levels.
How the heavy weights are performing
Energy major and Sensex heavy weight Reliance Industries stock went up by around 0.4 per cent while Oil India Limited went up by near 0.9 per cent. In banking sector Yes Bank continued its rally by logging around 1.4 per cent gains from its Wednesday close, SBI scrip too went up by around 0.9 per cent, shares of Federal Bank, City Union Bank and Axis Bank went up by more than 0.75 per cent.
9: 50 AM
Buy Capacite Infraprojects for 67% gains, advises HDFC Securities
Capacite Infraprojects Limited (CIL) reported strong 3QFY19 execution at Rs 4.5bn (5% beat, despite around Rs 500mn lower revenue owing to NGT ban and NBFC crisis). EBITDA margins dipped 80bps QoQ to 13.7% (due to negligible revenue booking on initial stage projects; also resulted in lower amortization of site establishment costs). Despite the margin dip, a 23% QoQ decline in depreciation led to PAT coming in line with our estimate at Rs 239mn.
On suggestion for investors in regard to Capacite Infraprojects counter Parikshit D Kandpal, Analyst at HDFC Securities told Zee Business online in a detailed research citing, “The fundamental of the counter is indicating strong upside potential for 67 per cent. An investor can buy the stock for target price of Rs 352 per share.” The counter is currently oscillating around Rs 210 per stock levels.
Buy Tech Mahindra for 17% gains, advises HDFC Securities
Tech Mahindra delivered healthy performance both on revenue and margin front. Revenue stood at $1,261mn (+3.5% QoQ, +4.3% CC), ahead of our est of $1,244mn. Enterprise (59% of rev) grew 4.2% QoQ led by Digital (33% of rev, +10% QoQ) and recovery in Manufacturing and BFSI.
On suggestion for investors in regard to Tech Mahindra counter Amit Chandra, Analyst at HDFC Securities told Zee Business online in a detailed research citing, “The fundamental of the IT counter is indicating an upside potential for 17 per cent. An investor can buy the stock for target price of Rs 880 per share.” The counter is currently oscillating around Rs 750 per stock levels.
9: 42 AM
Top five gaining stocks
Shares of Vakrangee, Siemens, Meghmani Organics, Shankara Buildings and Avanti Feeds were the top five gaining counters in early morning session. Vakrangee stok rose by around 6.8 per cent, Siemens shares went up by 7.1 per cent, Meghmani Organics stock went up by 4.8 per cent, Shankara Buildings stock rose around 5 per cent while Avanti Feeds shars went southward by around 4.2 per cent.
9: 35 AM
Top five losing stocks
Shares of Reliance Infra, Reliance Power, Reliance Capital, IL&FS Transportation and Adani Power were the top five losing counters in early morning session. Reliance Infra stok crashed by around 13 per cent, Reliane Power shares slide by 5.5 per cent, Reliance Capital stock went down by 4.8 per cent, Adani Power bleed by around 5 per cent while IL&FS Transportation shars went southward by around 4.8 per cent.
BSE PSU leads rally
The BSE PSU index rose maximyum by logging 0.35 per cent gains. In PSU sector stocks, Gujarat Mineral Development Corp rose near 1.67 per cent, HUDCO stocks rose nera 1 per cent, GIC shares rose by around 0.77 per cent.
Buy Marico Limited for 25% gains, advises Narnolia Financial Advisors
Marico’s numbers for Q3FY19 remained inline with market estimates; sales, EBITDA and PAT were up by 15%,16% and 13% respectively to Rs 1861 cr(expe. Rs 1847 cr),Rs 999 cr(expe. Rs 981 cr) and Rs252 cr( expe. Rs 260 cr). Domestic volume growth for the quarter remained 5% while International business (IB) grew by 11%in cc terms led by better performance of Bangladesh (16% cc growth) and Vietnam (15% cc growth).
On suggestion for investors in regard to Marico counter Rajeev Anand, Research Analyst, Narnolia Financial Advisors informed Zee Business online in a detailed research citing, “The fundamentals of the Marico counter suggests an upside potential for 25 per cent. An investor can take a buy position in this stock for the target of Rs 460 per shares.” Currently, the stock is oscillating around Rs 368 per counter.
Asian share markets were in a muted mood on Thursday and looked set for a sleepy session with China still on holiday and no major economic data on the diary.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little moved in early trade after ending almost unchanged on Wednesday.
Japan’s Nikkei dipped 0.2 per cent, while E-Mini futures for the S&P 500 were off 0.06 per cent in very thin trade.
Wall Street had already snoozed through a subdued session, though disappointing revenue forecasts hammered shares of the major videogame makers.
The Dow fell 0.08 per cent, while the S&P 500 lost 0.22 per cent and the Nasdaq 0.36 per cent.
Markets are still waiting on developments in the Sino-US trade dispute after President Donald Trump offered little new to chew on in his State of the Union speech.