Nifty trades below 21,800, private banks under pressure

The domestic equity indices traded with significant losses in early afternoon trade. The Nifty traded below the 21,800 level. Private bank shares extended losses for the fifth consecutive trading session.

At 12:29 IST, the barometer index, the S&P BSE Sensex, was down 523.01 points or 0.72% to 71,628.99. The Nifty 50 index lost 149.30 points or 0.68% to 21,781.20.

In the broader market, the S&P BSE Mid-Cap index rose 0.64% and the S&P BSE Small-Cap index shed 0.02%.

The market breadth was negative. On the BSE, 1,722 shares rose and 2,020 shares fell. A total of 123 shares were unchanged.

RBI MPC Outcome:

The Reserve Bank of India�s (RBI) Monetary Policy Committee (MPC) on Thursday decided to keep its key policy rates unchanged.

It has 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%.

In its last bi-monthly monetary policy of FY24, the RBI Governor Shaktikanta Das-headed six-member MPC maintained the repo rate at 6.5% for the fifth consecutive time.

Global economy presenting a mixed picture, odds of a soft landing has increased globally. Emergence of new flash points impart uncertainty to global macro landscape, the RBI Governor said.

MPC will carefully monitor generalisation of food price pressures which can fritter away the gains in easing of core inflation. Monetary policy must continue to be actively disinflationary to align inflation to 4 percent target on a durable basis. MPC will remain resolute in this commitment. Amidst current headwinds, elevated level of public debt is raising issues of macroeconomic stability in countries, including advanced ones, Governor Shaktikanta Das said.

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, rose 0.82% to 15.63. The Nifty 29 February 2024 futures were trading at 21,865.15, at a premium of 83.95 points as compared with the spot at 21,781.20.

The Nifty option chain for the 29 February 2024 expiry showed maximum Call OI of 47.5 lakh contracts at the 23,000 strike price. Maximum Put OI of 36.5 lakh contracts were seen at 21,000 strike price.

Buzzing Index:

The Nifty Private Bank index declined 1.41% to 22,959.45. The index fell 2.81% in five trading sessions.

Axis Bank (down 2.39%), ICICI Bank (down 2.23%), Kotak Mahindra Bank (down 2.03%), HDFC Bank (down 0.9%), IDFC First Bank (down 0.78%), IndusInd Bank (down 0.71%) and Federal Bank (down 0.17%).

On the other hand, City Union Bank (up 2.1%), RBL Bank (up 0.25%) and Bandhan Bank (up 0.12%) edged higher.

Stocks in Spotlight:

Star Cement rallied 3.89% after the cement maker�s consolidated net profit grew 39.06% to Rs 73.52 crore in Q3 FY24 as against Rs 52.87 crore in Q3 FY23. Revenue from operations rose 5.54% year on year (YoY) to Rs 651.40 crore in the quarter ended 31 December 2023.

Tata Consultancy Services (TCS) rose 0.76%. The IT major said that it has entered into a strategic partnership with Enento Group for transforming the latter�s IT applications, cloud, digital workplace, and IT security for resilient business operations.

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