Benchmarks were trading half a percent higher on Friday afternoon, led by computer stocks. The market opened on a positive note amid positive global indices, indices rose further in the first half of the year after the Reserve Bank of India’s monetary policy committee chose to maintain a status quo on key rates.
The gains were also supported by heavyweights like Reliance. The volatility index weakened 2.36 percent to drop below 16 to 15.77. At 1 p.m., the Sensex BSE which had passed the 60,000 mark in the first half, recording an intraday high of 60,212.30 was trading at 59,996.36, up 318.53 points or 0.53% . It recorded an intraday low of 59,830.93.
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The Nifty 50, which nearly missed the 18,000 mark with an intraday high of 17,941.85, was trading at 17,886.25, up 95.90 points or 0.54%. It hit an intraday low of 17,840.35. IT stocks advanced further ahead of second quarter FY2022 results. Tata Consultancy Services will be the first large company to report second quarter results today.
Wipro, Reliance, Infosys, Tata Motors and Tech Mahindra were the top winners on the Nifty 50 while Divi’s Lab, Hindustan Unilever, Dr Reddy, NTPC and Shree Cement were the main losers.
The RBI decided to maintain co status because the repo rate is 4 percent and the repo rate is 3.35 percent. Against a backdrop of an uneven recovery in growth and concerns about soaring inflation, it also continued its accommodative stance to support growth.
“The MPC voted unanimously to maintain the status quo on the key repo rate and a 5: 1 majority to maintain the accommodative position,” said RBI Governor Shaktikanta Das, who chairs the MPC, adding that the position remains accommodative to revive and maintain growth.
According to Nilesh Shah, Group Chairman and CEO, Kotak Mahindra Asset Management Company, RBI policy aims to achieve several goals.
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“Keep growth sustained, inflation expectations under control, financial markets stable, adequate and appropriate liquidity, the yield curve in shape and ensure the smooth passage of the government borrowing program.” They reassured the markets that the normalization of monetary policy will be gradual and calibrated, âShah said.
Churchil Bhatt, EVP Debt Investments, Kotak Mahindra Life Insurance Company Limited said: âThe MPC has decided to maintain its accommodative policy and opted for a ‘resolute pause’ in policy rates to support ‘sustainable growth’ with a solid foundation. . While the MPC kept its GDP growth forecast for FY2022 at 9.5%, it revised its projection for FY2022 down 40 basis points to 5.3% due to lower food inflation.
âThe MPC recognized that crude oil and other commodity prices remain a threat to the inflation path, but weak demand should limit the pass-through to output prices. Importantly, on the equity front, the RBI marked the start of a âgradual reductionâ in liquidity by extending the duration of VRR auctions, a move widely expected by the markets. While the RBI has refrained from committing a GSAP amount to support bond yields, its focus on “orderly movement of the yield curve” should reassure bond markets. We expect the 10Y Gsec to trade in a range of 6.20% to 6.40% in the near term, âadded Bhatt.
Well received by the market
According to experts, the market reacted well to the announcement as no curve ball was launched this session. Jimeet Modi, founder and CEO of Samco Group, said RBI’s strategy for the future is likely to be “a classic textbook” with cash management, the first check on their agenda, followed by an increase in catches. in reverse boarding.
âThe VRRR liquidity auction schedule through December is a welcome move that definitely sheds more light on the liquidity reduction front. If the Fed’s position in November goes as expected, then December could be the moment when the RBI will finally start to reduce the spread between the repo and reverse repo rates. In short, this time the policy has not thrown any balls, and therefore has been well received by the market, âModi said.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: âSome initiatives to absorb excess liquidity from the system have been welcomed by the money market, which has pushed the 10-year yield up to 6, 3%. In short, no hawkish message from the Central Bank: the policy will support growth; inflation will be under control.
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Rahul Sharma, co-founder of Equity99 when announcing the RBI policy, said, âWe expect the policy will benefit the market and the banks will perform well. NBFC internal grievance mechanism.
Pharma, FMCG and Realty down on profit taking
On a sectoral level, IT, Automotive and Metals were concentrated while Realty, Pharma and FMCG recorded profits. Nifty IT was up 2 percent while Nifty Metal was up 0.61 percent. Nifty Auto was up 0.57 percent.
Meanwhile, Nifty Realty was down 2.80%. Nifty Pharma and Nifty Healthcare Index fell 0.45% and 0.46%. Nifty FMCG and Nifty Consumer Durables fell 0.46% and 0.27%. PSU Bank shares also trailed with Nifty PSU Bank down 0.47%.
The larger indices were also in the green. Nifty Midcap 50 rose 0.35% while Nifty Smallcap 50 rose 0.83%. The S&P BSE Midcap was up 0.12% while the S&P BSE Smallcap was up 0.63%.