Sensex, Nifty turn volatile after RBI cuts repo rate

Indian equity benchmarks turned slightly volatile in afternoon deals, after the RBI's Monetary Policy Committee (MPC) lowered the repo rate by 25 basis points to 6.25 percent. The MPC changed the policy stance to ‘neutral’ from ‘calibrated tightening’. It also pegged H1 FY20 (April-September) inflation at 3.2-3.4 percent, assuming a normal monsoon. It also pegged inflation at 3.9 percent in Q3 FY20. The trade remained in positive terrain, as some support came with Moody's Investors Service’s statement that the direct cash transfer programme for farmers and tax relief steps for the middle-class will give a fiscal stimulus of about 0.45 percent of GDP, and support growth through increased consumption, though at a fiscal cost. Meanwhile, with an aim to meet additional expenses, the government has decided to raise additional Rs 36,000 crore through dated securities during the current financial year (FY19). The government will borrow additional Rs 36,000 crore through two tranches of Rs 18,000 crore each during March 11-15 and March 18-22. In the currency front, the rupee emerged strong, and was trading at 71.48 against US Dollar, higher by 8 paise.

On the global front, Asian markets were trading mostly in red, over weak cues overnight from Wall Street as higher commodity prices lifted resources stocks. Back home, the BSE Sensex is currently trading at 37051.82, up by 76.59 points or 0.21% after trading in a range of 36966.00 and 37172.18. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Telecom up by 2.44%, Auto up by 1.48%, Healthcare up by 1.46%, Consumer Discretionary Goods & Services up by 0.90% and Basic Materials up by 0.67%, while Utilities down by 0.43%, Energy down by 0.42%, Metal down by 0.11% and Oil & Gas down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 5.28%, Bajaj Auto up by 2.80%, Yes Bank up by 2.30%, Tata Motors - DVR up by 2.01% and Tata Motors up by 1.88%. On the flip side, Indusind Bank down by 0.81%, Reliance Industries down by 0.69%, HDFC down by 0.68%, Vedanta down by 0.61% and Power Grid down by 0.21% were the top losers.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to implement the Central Public Sector Undertaking (CPSU) Scheme Phase-II for setting up 12,000 MW grid-connected solar photovoltaic (PV) power projects with Viability Gap Funding (VGF) support of Rs 8,580 crore for self-use or use by both central and state government entities.

With the implementation of the scheme, 12,000 MW or more of grid connected solar PV power projects would be set up by government producers in four years (2019-20 to 2022-23), thereby generating investment of about Rs 48,000 crore. The Scheme will mandate use of both SPV cells and modules manufactured domestically as per specifications and testing requirements fixed by Ministry of New & Renewable Energy (MNRE).

The proposal will provide direct employment to around 60,000 persons for about one year in pre-commissioning activities/construction phase and to around 18,000 persons for about 25 years in the operation and maintenance period. In addition, more than 1.2 lakh employment opportunities will be created for the local population by way of involvement in setting up of solar power projects and also in manufacturing of domestically produced cells and modules. 

The CNX Nifty is currently trading at 11085.05, up by 22.60 points or 0.20% after trading in a range of 11055.95 and 11118.10. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 5.16%, Bajaj Auto up by 2.99%, Bharti Infratel up by 2.35%, Zee Entertainment up by 2.32% and Yes Bank up by 2.15%. On the flip side, JSW Steel down by 2.15%, Tech Mahindra down by 1.26%, GAIL India down by 0.82%, Reliance Industries down by 0.79% and Indusind Bank down by 0.79% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 122.78 points or 0.59% to 20,751.28, KOSPI fell 0.04 points or 0% to 2,203.42 and Jakarta Composite dropped 13.39 points or 0.2% to 6,534.49.

On the flip side, Straits Times advanced 23.19 points or 0.73% to 3,207.75.