Firm trade prevails; RBI cuts repo rates by 25 bps

Equity benchmarks as well as broader markets remained marginally higher in late afternoon trade, as the Reserve Bank of India’s (RBI’s) announcement of policy decision was in line market expectations. Monetary Policy Committee slashed the repo rate by 25 basis points. With this, the repo rate which was earlier 6.50 per cent will now go down to 6.25 per cent. Sentiments were on optimistic note after World Bank stated that India’s GDP growth will remain strong at 7.6 per cent in 2016 and 7.7 per cent in 2017. Strength in Indian rupee too supported the market. In scrip specific development, VST Tiller Tractors gained after the company reported 2,440 units’ sales of Power Tillers and Tractors for month of September, 2016. On the global front, European shares were trading in green on Tuesday, with Deutsche Bank further recovering after recent steep losses.

The BSE Sensex is currently trading at 28299.16, up by 55.87 points or 0.20% after trading in a range of 28242.25 and 28402.65. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.11%, while Small cap index was up by 0.24%.

The gaining sectoral indices on the BSE were Oil & Gas up by 2.08%, PSU up by 0.79%, Realty up by 0.47%, IT up by 0.45%, Metal up by 0.34%, while Capital Goods down by 0.52%, Consumer Durables down by 0.50%, Auto down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 4.72%, ONGC up by 4.15%, Tata Steel up by 1.66%, Cipla up by 0.95% and Adani Ports &Special up by 0.93%. On the flip side, Coal India down by 1.92%, Mahindra & Mahindra down by 1.43%, Larsen & Toubro down by 1.42%, Axis Bank down by 0.89% and Hindustan Unilever down by 0.56% were the top losers.

Meanwhile, the World Bank in its latest report on ‘South Asia Economic Focus’ has said that in India, Gross Domestic Product (GDP) growth will remain strong at 7.6 per cent in 2016 and 7.7 per cent in 2017, supported by expectations of a rebound in agriculture, civil service pay reforms supporting consumption, increasingly positive contributions from exports and a recovery of private investment in the medium term.

Further, it said that India’s economic growth remained robust, which, as in the past, is expected to support continued poverty reduction. This year is expected to see some convergence in rural and urban economies, supported by stimulating policies, such as passage of Goods and Services Tax (GST) and civil pay revisions, along with good monsoons.

However, the biannual report said that India faces the challenge of further accelerating the responsiveness of poverty reduction to growth, enforcing inclusion of presently excluded groups (such as women and scheduled tribes), and extending gains to a broader range of human development outcomes related to health, nutrition, education and gender, where the country continues to rank poorly. Further, private investment also faces several domestic impediments in the form of corporate debt overhang, stress in the financial sector, and regulatory and policy challenges. It said that if these bottlenecks are not alleviated, subdued private investment would create downside pressures on India’s potential growth.

The report also said that South Asia remains a global growth hotspot and has proven resilient to external headwinds such as China’s slowdown, uncertainty around stimulus policy in advanced economies, and slowing remittances. Though, the report after a reality check on the state of private investment in South Asia, pointed that the region has fallen short of expectations. Mobilizing domestic savings remains key at the aggregate level.

The CNX Nifty is currently trading at 8745.90, up by 7.80 points or 0.09% after trading in a range of 8736.10 and 8778.30. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 4.32%, ONGC up by 4.07%, Tata Power up by 1.90%, Tech Mahindra up by 1.85% and Tata Steel up by 1.79%. On the flip side, Zee Entertainment down by 2.96%, Coal India down by 1.94%, Larsen & Toubro down by 1.59%, Ambuja Cement down by 1.53% and Mahindra & Mahindra down by 1.52% were the top losers.

Asian market were trading in green; Jakarta Composite increased 3.37 points or 0.06% to 5,467.29, FTSE Bursa Malaysia KLCI increased 8.46 points or 0.51% to 1,661.01, KOSPI Index increased 11.23 points or 0.55% to 2,054.86, Taiwan Weighted jumped 53.57 points or 0.58% to 9,287.77, Hang Seng climbed 105.01 points or 0.45% to 23,689.44 and Nikkei 225 surged 136.98 points or 0.83% to 16,735.65

European markets were trading in green; France’s CAC increased 37.83 points or 0.85% to 4,491.39, Germany’s DAX jumped 65.39 points or 0.62% to 10,576.41 and UK’s FTSE 100 surged 85.92 points or 1.23% to 7,069.44.