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Nifty above 16,950 mark, breadth positive

Published on Sep 28, 2022 11:33

The benchmark indices traded with minor cuts in the mid-morning trade. Negative global cues dampened the sentiment. Investors were cautious ahead of Reserve Bank of India (RBI)`s policy announcement later this week. The Nifty traded above 16,950 mark after hitting the day`s low of 16,825.40 in the early trade. Bank shares extended losses for the sixth consecutive trading session.

At 11:30 IST, the barometer index, the S&P BSE Sensex, was down 106.57 points or 0.19% to 57,000.95. The Nifty 50 index declined 31points or 0.18% to 16,976.40.

In the broader market, the S&P BSE Mid-Cap index gained 0.20% while the S&P BSE Small-Cap index rose 0.17%.

The market breadth was positive. On the BSE, 1,581 shares rose and 1,576 shares fell. A total of 158 shares were unchanged.

Meanwhile, the Reserve Bank of India (RBI)`s six-member Monetary Policy Committee meeting will begin today, 28 September 2022. RBI Governor Shaktikanta Das will announce the MPC decision on 30 September 2022, the last date of the meeting. The RBI is widely expected to maintain the balancing act between growth and inflation.

In the past three policy reviews, the RBI`s rate-setting panel has raised 140 basis points in total since May this year. Currently, the repo rate, the interest rate at which the RBI lends to the commercial bank, stands at 5.40%.

Buzzing Index:

The Nifty Bank index shed 0.73% to 38,078, extending its losing run for the sixth trading session. The index tumbled 8.18% in six trading sessions.

Bandhan Bank (down 3.37%), Punjab National Bank (down 2.86%), IndusInd Bank (down 1.86%), IDFC First Bank (down 1.58%), AU Small Finance Bank (down 1.57%), HDFC Bank (down 1.46%), Axis Bank (down 1.4%), Federal Bank (down 1.01%), Bank of Baroda (down 0.9%) and State Bank of India (down 0.61%) edged lower.

Axis Bank declined 1.4%. The private lender said that it has entered into an indicative and non-binding term sheet with Go Digit Life Insurance for an acquisition of up to 9.94% stake in the life insurer. The bank will invest an amount between Rs 49.90 crore to Rs 69.90 crore, in two tranches, by subscribing to equity shares of the company, for an equity stake of up to 9.94% of the paid-up equity share capital of the company, subject to execution of definitive agreements whose terms and conditions are to be mutually agreed upon, and fulfilment of other terms and conditions.

Stocks in Spotlight:

Max Ventures and Industries gained 1.40% after the company announced that its real estate arm Max Estates has onboarded New York Life Insurance Company (NYL), as co-investor for its Office Project at Noida. The bid of Max Square, Max Estates` SPV, for two land parcels auctioned by Axis Bank for a total cost of Rs 220 crore was accepted in early August.

Power Grid Corporation of India rose 0.83%. The PSU company announced that its board approved the appointment of G. Ravisankar as chief financial officer (CFO) of the company with effect from 26 September, 2022.

Global Markets:

Asian stocks traded lower on Wednesday as surging borrowing costs fed fears of a global recession.

Consumer inflation excluding fresh food is likely to rise this year, but the rate of increase will slow thereafter on energy prices, minutes from Bank of Japan`s July meeting said. A few members also said inflation, excluding fresh food and energy, is unlikely to reach 2% within its projection period.

Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses.

Global ratings agency Moody`s has warned the British government that plans for unfunded tax cuts could lead to larger budget deficits and higher interest rates, threatening the country`s credibility with investors. The agency said large unfunded tax cuts were "credit negative", leading to structurally higher deficits amid rising borrowing costs, a weaker growth outlook and acute public spending pressure.

U.S. stocks gave up early gains to fall deeper into a bear market on Tuesday as investors remained nervous about a potential global recession.

The Fed needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday.

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