Nifty scales above 23,200; consumer durables advance

The benchmark indices continued to extend gains and hit fresh day`s high in early afternoon trade after the Reserve Bank of India`s monetary policy committee raised India`s FY25 real GDP forecast to 7.2% from the earlier 7%. The Nifty climbed above the 23,200 level after hitting the day�s low of 22,789.05 in early trade. Consumer durables stocks gained for the third day in a row.

At 12:30 IST, the barometer index, the S&P BSE Sensex was jumped 1,363.60 points or 1.82% to 76,438.11. The Nifty 50 index gained 386.80 points or 1.69% to 23,208.20.

In the broader market, the S&P BSE Mid-Cap index added 0.68% and the S&P BSE Small-Cap index advanced 1.67%.

The market breadth was strong. On the BSE, 2,743 shares rose and 950 shares fell. A total of 138 shares were unchanged.

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%.

RBI`s MPC at its meeting today, 7 June 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 projected real GDP growth for 2024-25 has been revised upward to 7.2%. The quarterly breakdown is as follows: Q1 at 7.3%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%. This represents a slight improvement from the previous estimate, where the GDP growth was projected at 7%, with Q1 at 7.1%, Q2 at 6.9%, Q3 at 7%, and Q4 also at 7%. The risks associated with this projection are considered evenly balanced.

The projected CPI inflation for 2024-25 remains unchanged at 4.5%. The quarterly breakdown is as follows: Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%. This is consistent with the previous meeting`s projection, where CPI inflation for the same period was also estimated at 4.5%, with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.

The minutes of the MPC�s meeting will be published on 21 June 2024. The next meeting of the MPC is scheduled during August 6 to 8, 2024.

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, rose 0.53% to 16.89. The Nifty 27 June 2024 futures were trading at 23,213.05, at a premium of 4.85 points as compared with the spot at 23,208.20.

The Nifty option chain for the 27 June 2024 expiry showed maximum Call OI of 71 lakh contracts at the 24,000 strike price. Maximum Put OI of 48 lakh contracts were seen at 22,000 strike price.

Buzzing Index:

The Nifty Consumer Durables index added 1.43% to 36,240.40. The index rallied 5.92% in three consecutive trading sessions.

Whirlpool of India (up 4.55%), Kajaria Ceramics (up 3.2%), Rajesh Exports (up 2.9%), Dixon Technologies (India) (up 2.85%) and Blue Star (up 2.76%), Century Plyboards (India) (up 2.67%), Titan Company (up 1.94%), Kalyan Jewellers India (up 1.89%), Amber Enterprises India (up 1.84%) and Cera Sanitaryware (up 1.17%) advanced.

On the other hand, V-Guard Industries (down 1.3%), Crompton Greaves Consumer Electricals (down 0.41%) and Voltas (down 0.04%) edged lower.

Stocks in Spotlight :

Dixon Technologies (India) gained 2.48% after the company entered into a term sheet with HKC Corporation to form a joint venture (JV), subject to receipt of necessary statutory approvals and signing of definitive agreements.

Tata Chemicals fell 1.80% after the Chester Crown Court, United Kingdom (UK), ordered a fine of GBP 11,00,000 on Tata Chemicals Europe, company�s subsidiary in UK, for safety incident which occurred in 2016.

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