Nifty comes off 15,000 mark; RBI keeps repo rate unchanged

Domestic indices came off the day`s high as profit taking emerged at higher level. Banks and realty shares were in demand. Auto shares corrected after recent rally. The Reserve Bank of India (RBI) kept the repo rate unchanged at 4% while the stance remained `accomodative`.

At 10:29 IST, the barometer index, the S&P BSE Sensex, was up 200.39 points or 0.4% at 50,814.04. The Nifty 50 index was up 38.2 points or 0.26% at 14,933.85.

The Sensex scaled record high of 51,073.27 while the Nifty hit record high of 15,014.65 level in early trade.

In broader market, the S&P BSE Mid-Cap index was down 0.59% while the S&P BSE Small-Cap index slipped 0.26%.

The market breadth was almost even. On the BSE, 1206 shares rose and 1254 shares fell. A total of 146 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 104,838,939 with 2,281,731 deaths. India reported 151,460 active cases of COVID-19 infection and 154,823 deaths while 104,96,308 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

RBI MPC Outcome:

The meeting of the six-member Monetary Policy Committee headed by RBI Governor Shaktikanta Das concluded this morning. The committee has kept the interest rates unchanged, maintaining repo rate at 4% and the reverse repo rate at 3.35%.

The MPC decided to continue with an accommodative stance of monetary policy as long as necessary, at least through the current financial year and into next year to revive growth on a durable basis and mitigate the impact of Covid-19, Das said.

Inflation has been better than what was expected in December meeting and eased below tolerance level of 6%. The RBI projected GDP growth of 10.5% in FY22 for India while projection for CPI-based inflation was revised to 5.2% for Q4FY21.

The RBI had last revised its policy rate on 22 May 2020 to perk up demand by cutting interest rate to a historic low. The latest Economic Survey said that there are expectations of a rebound of the economy with a 11% growth in the next fiscal.

Buzzing Index:

The Nifty Private Bank index advanced 2.03% while the Nifty PSU Bank index surged 7.09% following RBI`s policy decision.

Among the private banks, Kotak Mahindra Bank (up 3.90%), RBL Bank (up 2.29%), IndusInd Bank (up 2.26%), Axis Bank (up 2.16%), HDFC Bank (up 1.70%), IDFC First Bank (up 1.02%), City Union Bank (up 0.34%) and ICICI Bank (up 0.33%) advanced while Federal Bank (down 0.47%) and Bandhan Bank (down 0.37%) declined.

Among the PSU banks, SBI (up 13.63%), Indian Bank (up 8.76%), Bank of India (up 5.49%), Central Bank of India (up 4.86%), Bank of Baroda (up 4.57%), UCO Bank (up 3.73%), Union Bank of India (up 3.33%), Bank of Maharashtra (up 2.49%), Canara Bank (up 2.28%), Jammu and Kashmir Bank (up 1.62%) and Indian Overseas Bank (up 1.27%) edged higher.

Earnings Today:

Britannia Industries (up 0.56%) and Mahindra & Mahindra (down 1.25%) will announce Q3 results today.

Punjab National Bank (up 3.46%), Aditya Birla Capital (up 0.77%), Alkem Laboratories (up 0.51%), Ashoka Buildcon (up 0.54%), Cadila Healthcare (down 0.13%), CG Power and Industrial Solutions (up 0.23%), Fortis Healthcare (up 0.23%), GSK Pharmaceuticals (up 0.64%), Gujarat Gas (up 0.09%), Jubilant Life Sciences (up 0.66%), Narayana Hrudayalaya (up 3%), Pfizer (up 1.07%), RCF (up 0.63%), Shipping Corporation of India (up 1.71%) will also announce their quarterly results today.

Mrs Bectors Food Specialities (up 0.74%) will announce its first quarterly numbers post listing on bourses on 24 December 2020.

Earnings Impact:

Hero MotoCorp fell 0.86%. The company`s consolidated net profit jumped 13.7% to Rs 1,029.17 crore on a 38.9% rise in net sales at Rs 9,827.05 crore in Q3 December 2020 over Q3 December 2019. Consolidated profit before tax (PBT) surged 30.6% to Rs 1,363.92 crore in Q3 December 2020 as against Rs 1,044.44 crore in Q3 December 2019. On a standalone basis, volumes of the company stood at 18.45 lakh units sold in Q3 FY21, registering a growth of 19.7% Y-o-Y (year-on-year). Profit After Tax (PAT) grew 23.2% to Rs 1,084 crore and net revenue from operations rose 39.7% to Rs 9,776 crore in Q3 FY21 over Q3 FY20. Earnings Before Interest, Tax, Depreciation, & Amortization (EBITDA) for the quarter stood at Rs 1,414 crore, reflecting 14.5% EBITDA margin and a growth of 36.1%.

Trent was up 1.17% after the company`s consolidated net profit jumped 30.2% to Rs 64.03 crore on a 13.6% rise in net sales at Rs 853.63 crore in Q3 December 2020 over Q3 December 2019. Profit before tax (PBT) fell 4.5% to Rs 89.70 crore in Q3 December 2020 as against Rs 93.89 crore in Q3 December 2019. Westside revenues in Q3 were 78% as compared to the corresponding previous period (Like to Like of negative 26%). Nevertheless, Trent said the trajectory of revenues has continued to improve month to month with encouraging trends. For instance, in Jan 2021 (end of season sale month), traction for full price merchandise was consistent with the levels witnessed in the previous year in both quantity and value terms.

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