Barometers snaps 2-day loss; Nifty ends at 17,871.70; VIX drops below 14 mark

The domestic equity benchmarks ended with strong gains on Wednesday, breaking two-day losing streak. Bargain hunting emerged as RBI`s policy outcome was on expected lines. Positive global cues also supported buying. The Nifty settled above the 17,870 mark after hitting day`s low of 17,744.15 in early trade. All the sectoral indices on the NSE ended in the green led by IT, metal and healthcare indices.

The barometer index, the S&P BSE Sensex advanced 377.75 points or 0.63% to 60,663.79. The Nifty 50 index added 150.20 points or 0.85% to 17,871.70.

In the broader market, the S&P BSE Mid-Cap index rose 1% while the S&P BSE Small-Cap index gained 0.76%.

The market breadth was positive. On the BSE, 1914 shares rose, and 1587 shares fell. A total of 130 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, slipped 3.75% to 13.60.

RBI Monetary Policy Outcome:

The three-day monetary policy meeting concluded today. The Reserve Bank of India (RBI) raised the key policy repo rate by 25 basis points and said it remained focused on the withdrawal of accomodation.

On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) today (8 February 2023) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50% with immediate effect.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 6.25% and the marginal standing facility (MSF) rate and the Bank Rate to 6.75%.

The MPC also decided by a majority of 4 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The outlook for inflation is mixed. Inflation is projected to be at 6.5% in 2022-23, with Q4 at 5.7%. On the assumption of a normal monsoon, CPI inflation is projected at 5.3% for 2023-24, with Q1 at 5%, Q2 at 5.4%, Q3 at 5.4% and Q4 at 5.6%, and risks evenly balanced.

Real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% and Q4 at 5.8%, and risks broadly balanced.

"The global economic outlook does not look as grim now as it did a few months ago. Growth prospects in major economies have improved, while inflation is on a descent, though it still remains well above the target in major economies," RBI Governor Shaktikanta Das said in his statement.

"Inflation is expected to average 5.6% in Q4:2023-24," he added.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper advanced to 7.344 from its close of 7.309 recorded in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.465, compared with its close of 82.70 during the previous trading session.

MCX Gold futures for 5 April 2023 settlement declined 0.01% to Rs 57,250.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.27% to 103.15.

The United States 10-year bond yield declined 0.48% to 3.657.

In the commodities market, Brent crude for March 2023 settlement gained 81 cents or 0.97% to $84.52 a barrel.

Global Markets:

European shares rose across the board while Asian stocks ended mixed on Wednesday, as Federal Reserve Chairman Jerome Powell overnight acknowledged that inflation is declining, a sign the central bank may soon pause its rate hikes.

US stocks advanced on Tuesday, but trade was choppy as investors digested comments from Federal Reserve Chair Jerome Powell about how long the central bank might need to tame inflation.

US inflation is starting to cool but the road ahead will likely be long and bumpy, Federal Reserve Chair Jerome Powell warned Tuesday, adding that stronger-than-expected economic data could bring more rate hikes.

Stocks in Spotlight:

Shares of new-age tech companies were in demand. Zomato, Paytm, and Policybazaar rallied between 6.76%-15% each.

Paytm surged 15% after the company`s lending business witnesses a 327% year on year (YoY) growth in disbursements to Rs 3,928 ($480 million) in January 2023. The number of loans disbursed soared 103% (YoY) to 3.9 million as on 31 January 2023.

Meanwhile, a foreign broker upgraded the Paytm stock by two notches from `underperform` to `outperform`. The brokerage also raised its target price on the stock from Rs 450 to Rs 800.

Adani Group stocks witnessed sharp pullback. Adani Enterprises (up 19.76% to Rs 2158.65) was the top gainer on Nifty. The stock has doubled since last week. Adani Ports rallied by over 8%. Adani Transmission and Adani Power were locked in a 5% upper circuit.

TCS rose 1.38% after it won a large deal from UK-based Phoenix Group Holdings Plc.

Symphony jumped 8.47% to Rs 1047.30 after announcing a share buyback through the tender offer route. The company will execute the buyback at Rs 2,000 per share for an amount not exceeding Rs 200 crore.

Intellect Design Arena rose 4.36% after partnering with Amazon Web Services (AWS). Intellect`s underwriting customers will gain immediate access to the latest innovation, technology and resources from AWS.

Powered by Capital Market - Live News