The stock market indices reversed three day losing streak after Reserve Bank of India's monetary policy announcement. The markets rallied sharply after the Reserve Bank of India kept key policy interest rates unchanged for the 11th time in a row. The RBI Governor Shaktikanta Das has kept the repo rate and reverse repo rate unchanged at 4 percent and 3.35 percent respectively in its first monetary policy statement of FY 2023.
FMCG, metal, power, oil & gas indices up 1-2 percent. BSE midcap and smallcap indices rose nearly 1 percent each
At close, the Sensex was up 412.23 points or 0.70 percent at 59,447.18. The broader Nifty was up 144.80 points or 0.82 percent at 17,784.30. About 2232 shares have advanced, 1072 shares declined, and 117 shares are unchanged.
Among top Nifty gainers were Grasim Industries, ITC, SBI Life Insurance, JSW Steel and M&M. Cipla, NTPC, Tech Mahindra, Maruti Suzuki and Sun Pharma were the top laggards.
Nifty has strong trend support of 17,600 - the medium term trend remains positive above the same, said Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities. On the higher side 18200/18600 expected. Auto and realty expected to outperform in the near-term.
ITC surged 4.36 percent to Rs 267.80. Mahindra & Mahindra jumped 2.70 percent to Rs 857.10. Dr Reddy's Laboratories soared 2.67 percent to Rs 4432.
The index heavyweight Reliance Industries soared 1.75 percent to Rs 2616.75. Titan soared 2.26 per cent to Rs 2514.50.
Only eight of the 30 scrips that are part of the Sensex closed in the red. Tech Mahindra fell 1.18 percent to Rs 1451.60. Maruti Suzuki fell 1.04 percent to Rs 7557.70. NTPC, HCL Technologies, Sun Pharma, HDFC and HDFC Bank were among the major Sensex losers
Weekly stock market review
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Markets ended flat during the week. Equity markets focused on corporate developments and the onset of Q4FY22 earnings, while worries around rising interest rates dampened the mood slightly. The announcement of a merger between HDFC and HDFC Bank was a notable event. Small-cap, capital goods and mid-caps were major gainers on a week-on-week basis
The Sensex was at 59,265 on April 8, 2022 ending flat during the week, while the Nifty was at 17,727 reporting small gain of 0.3 percent during the week. Midcap and Small cap Index outperformed during the week gaining 3.51 percent and 3.66 percent respectively.
Most of the sectoral Indices ended in green during the week. BSE Power was the top gainer gaining around 8.5 percent. While BSE FMCG, BSE Metal and BSE Capital gained around 4 percent each. Most of the other sectoral Index gained between 1 to 2 percent. BSE IT was the top loser with loss of around 2 percent while BSE Reality lost around 0.3 percent.
On the economy side, GST collections for February stood at Rs 1.4 lakh cr (Rs 1.33 lakh cr for January and Rs 1.384 lakh cr for December).
The RBI kept repo and reverse repo rate unchanged with all six members of the RBI MPC voting for retaining stance at “accommodative” while focusing on withdrawal of accommodation to ensure inflation remains within the target going forward, while supporting growth.
Investors in US appraised the likelihood of tighter monetary policy from the Federal Reserve to combat inflation. On Wednesday, the Federal Reserve disclosed its March meeting minutes, revealing that policymakers plan to reduce their bond holdings by a consensus amount of about $95 billion a month. The minutes also indicated potential interest rate hikes of 50 basis points in future meetings. The 10-year rate hit a fresh 3-year high on Thursday, at 2.667 percent, as investors continued to digest minutes from the previous Fed meeting. Investors in US are also looking ahead to earnings season, which will kick off next week with reports from five big banks.
The United Nations suspended Russia from the Human Rights Council in a vote Thursday. Ninety-three member states voted for the resolution. Twenty-four voted against, including Russia and China. India was among the 58 member states that abstained. The US Congress voted to revoke Russia’s trade status and ban oil and gas imports, along with banning all new investment in the country and sanctioning President Vladimir Putin’s daughters. The European Union has also approved new sanctions against Russia, including a landmark embargo on Russian coal imports COVID is in focus in China, with Shanghai reporting 20,398 new asymptomatic coronavirus cases and 824 new symptomatic cases on April 7.
Rupee surges 13 paise to 75.90 against dollar
The rupee appreciated 13 paise to settle at 75.90 (provisional) against the US dollar on Friday, amid the Reserve Bank of India maintaining status quo on the benchmark lending rate.
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd, said, USDINR spot closed 6 paise lower at 75.98 levels. The traditional correlation is back, with a strong US Dollar Index driving crude oil and other commodities lower. With US treasury bond yields trading at the highest levels since March-19, the US Dollar Index is finding demand.
The US central bank remains one of the most aggressive central bankers in the world in terms of monetary policy tightening but at the same time, USD also sports a strong negative real interest rate differential against many of the EM currencies. This is creating an interesting trend in the forex market. On One hand, US Dollar is appreciating against the developed market currencies like Euro, GBP and JPY but the same US Dollar is going sideways against many of the EM currencies, like the Indian Rupee.
Over the next week, trading will be truncated as Thursday and Friday are holidays. Over the past couple of days, USDINR has been driven upwards by a rising US Dollar Index. However, the pair lacks momentum due to falling oil prices. "We expect a rangebound market over the next week. We could see a range between 75.70 and 76.30 on April futures," said Banerjee.
Announcing the monetary policy, RBI Governor Shaktikanta Das said the Indian economy has large forex reserves and that it stands ready and resolute to defend the economy.
At the interbank forex market, the domestic unit opened at 75.99 against the US dollar and touched an intra-day high of 75.70 and finally closed at 75.90, registering a rise of 13 paise over its previous close.
On Thursday, the rupee had declined 19 paise to close at 76.03.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent up at 99.87.
European stocks rebound, dollar index hits 100
European shares rebounded on Friday, playing catch-up with a modest bounce the previous day on Wall Street, and the dollar index hit 100 for the first time in nearly two years as U.S. bond yields hovered near multi-year highs.
World stocks edged higher but were still on track for their first weekly loss in four as the prospect of aggressive global rate hikes and geopolitical uncertainty kept investors wary. Risk appetite declined during the week as minutes from the Federal Reserve and European Central Bank showed policymakers are set to ramp up efforts to rein in inflation.
At 1023 GMT, the MSCI world equity index, which tracks shares in 50 countries, was up 0.1 percent on the day but for the week was down 1.3 percent. The pan-European STOXX 600 was 0.9% higher. Futures for the S&P 500, Dow Jones Industrial Average and Nasdaq 100 were all up around 0.2 percent.
