Indices end flat as oil rally dampens sentiment; Nifty holds 22,500

Domestic equity indices closed nearly flat on Friday. The Nifty 50 index managed to hold above the 22,500 level. Banking and realty stocks witnessed buying interest. However, IT and auto stocks faced selling pressure.

The Reserve Bank of India`s (RBI) decision to maintain the status quo on interest rates was largely expected. However, concerns about rising food inflation and potential heatwaves dampened overall market enthusiasm.

Globally, increasing oil prices and ongoing tensions in the Middle East weighed on investor sentiment. Markets are now looking ahead to key US economic data, particularly non-farm payroll and unemployment figures, which could influence the Federal Reserve`s future rate decisions.

The S&P BSE Sensex added 20.59 points or 0.03% to 74,248.22. The Nifty 50 index shed 0.95 points to 22,513.70.

Kotak Mahindra Bank (up 2.09%), HDFC Bank (up 1.41%) and ITC (up 1.21%) supported the indices.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.50% and the S&P BSE Small-Cap index gained 0.50%.

The market breadth was strong. On the BSE, 2394 shares rose and 1460 shares fell. A total of 94 shares were unchanged.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, gained 1.04% to 11.34.

RBI Monetary Policy Outcome:

The Reserve Bank of India (RBI) monetary policy committee (MPC) has voted to keep the repo rate unchanged at 6.5%. This is the seventh time that the 6 member Monetary Policy Committee has decided to keep the key rates unchanged.

RBI`s MPC at its meeting today, 5 April 2024, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, 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 real GDP growth for 2024-25 is projected at 7% with Q1 at 7.1%; Q2 at 6.9%; Q3 at 7%; and Q4 also at 7%. The CPI inflation for 2024-25 is projected at 4.5% with Q1 at 4.9%; Q2 at 3.8%; Q3 at 4.6%; and Q4 at 4.5%.

RBI Governor Shaktikanta Das elaborated on the decision, stating that inflation has decreased from its peak of 5.7%. He noted favorable growth-inflation dynamics and a steady decline in core inflation, reaching its lowest point in nine months. Despite volatile food inflation in February, core inflation, excluding food and fuel, has shown a downward trend. Concerns remain regarding the impact of weather variations on inflation and economic stability.

The minutes of the MPC�s meeting will be published on 19 April 2024. The next meeting of the MPC is scheduled during June 5 to 7, 2024.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose 0.32% to 7.117 as compared with the previous close of 7.094.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.3125, compared with its close of 83.3900 during the previous trading session.

MCX Gold futures for 5 April 2024 settlement rose 0.10% to Rs 69,775.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.14% to 104.27.

The United States 10-year bond yield rose 0.61% to 4.334.

In the commodities market, Brent crude for May 2024 settlement rose 25 cents or 0.28% to $90.90 a barrel due to escalating tensions in the Middle East. Increased Israeli military activity in response to a potential Iranian attack has raised fears of a wider conflict. This comes on top of existing supply disruptions and higher-than-expected demand, which have already pushed oil prices up this year.

Global Markets:

European and Asian stocks closed lower on Friday, mirroring losses on Wall Street the previous day. This decline stemmed from uncertainty surrounding potential interest rate cuts and a significant rise in crude oil prices.

Financial markets in Mainland China, and Taiwan are closed for Qingming Festival on Friday.

U.S. stock indexes tumbled more than 1% on Thursday as Federal Reserve officials hinted at a cautious approach to future rate cuts. Investors were also wary ahead of the key U.S. monthly jobs report.

Minneapolis Fed President Neel Kashkari expressed doubts on Thursday about the possibility of rate cuts altogether, citing persistent inflation.

Stocks in Spotlight:

Bandhan Bank shed 0.35%. The Bank�s total deposits rose by 25.1% to Rs 1,35,198 crore in the quarter ended 31 March 2024 from Rs 1,08,069 crore recorded in the quarter ended 31 March 2023.

Bajaj Finance declined 1.47%. The NBFC announced that its new loans booked increased by 4% to 7.87 million in Q4 FY24 as compared to 7.56 million recorded in Q4 FY23.

Hero MotoCorp rose 0.03%. The company has received assessment orders/ demand notices pertaining to six assessment years from the Income Tax Department. The company has received the orders / notices pertaining to six assessment years, amounting to a tax demand of Rs 308.65 crore and interest thereon of Rs 296.22 crore. This is on account of certain disallowances, for the assessment years 2013-14 to 2017-18 and 2019-20.

LTIMindtree shed 0.18%. Aforza, the leading cloud and mobile solution specifically built for the Consumer Products industry, and LTIMindtree, announced a strategic partnership to deliver digital transformation in CRM & TPM across the consumer products industry.

Cipla declined 0.76%. The drug major said that the US drug regulator has issued Form 483, with six observations after inspecting its Patalganga manufacturing facility in Maharashtra.

Niyogin Fintech gained 2.57% after the company reported 90% increase in gross transaction value to Rs 11,034 crore in Q4 FY24 from Rs 5,817.8 crore recorded in Q4 FY23.

Kalyan Jewellers India ended flat at Rs 430.90. The jewellery retailer said that its revenue jumped approximately 38% from India operations during Q4 FY24 as compared to Q4 FY23.

Macrotech Developers added 1.99% after the company said that it has recorded pre-sales of Rs 4,230 crore in Q4 FY24, recording a growth of 40% on a YoY basis.

Trident rose 0.64%. The company said that the credit rating agency CARE Ratings has reaffirmed the company�s long-term bank facilities at "CARE AA� with `stable� outlook.

Sobha shed 0.53%. The company said that it has recorded total sales value of Rs 1,504 crore in Q4 FY24, up 2.77% from Rs 1,463.4 crore posted in Q4 FY23.

IPO Update:

The initial public offer (IPO) of Bharti Hexacom received 1,23,23,49,300 bids for shares as against 4,12,50,000 shares on offer, according to stock exchange data at 17:00 IST on Friday (5 April 2024). The issue was subscribed 29.88 times.

The issue opened for bidding on Wednesday (3 April 2024) and it will close on Friday (5 April 2024). The price band of the IPO is fixed at Rs 542 to 570 per share. An investor can bid for a minimum of 26 equity shares and in multiples thereof.

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