Bourses maintain upward momentum in late afternoon session

Indian equity markets maintained their upward momentum in the late afternoon session following the outcome of the Reserve Bank of India’s (RBI) monetary policy meeting where the central bank kept its key lending rates unchanged for the tenth consecutive time while maintaining an ‘accommodative stance’. On the Sensex pack, Kotak Mahindra Bank, HDFC Bank, Tata Steel and HDFC were the top gainers in the late afternoon trade. Traders overlooked the Reserve Bank of India pegged the economic growth rate for 2022-23 at 7.8 per cent, down from 9.2 per cent expected in 2021-22, in view of uncertainties on account of the pandemic and elevated global commodity prices. The Reserve Bank’s growth projection for next financial year is lower than 8-8.5 per cent projected by the Finance Ministry in the recent Economic Survey which was tabled in Parliament earlier in the month.

On the global front, Asian markets were trading mostly in green and European markets were trading higher as traders jostled for position ahead of the release of US inflation data later in the day that could have a huge bearing on the Federal Reserve's rate hike plans.

The BSE Sensex is currently trading at 59011.86, up by 545.89 points or 0.93% after trading in a range of 58332.28 and 59054.05. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.41%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Power up by 1.37%, Bankex up by 1.32%, Metal up by 1.29%, Realty up by 1.17% and Utilities was up by 1.04%, while there were no losers on sectoral indices on the BSE

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.26%, HDFC Bank up by 2.25%, Tata Steel up by 2.24%, HDFC up by 1.95% and Infosys up by 1.58%. On the flip side, Maruti Suzuki down by 1.30%, Ultratech Cement down by 0.26% and Nestle down by 0.04% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its bi-monthly monetary policy review has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. This is the tenth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the status quo.

Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent. The MPC decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

On the domestic front, the projection for real gross domestic product (GDP) growth is retained at 9.2 per cent in 2021-22, surpassing its pre-pandemic (2019-20) level. The real GDP growth for 2022-23 is projected at 7.8 per cent with Q1:2022-23 at 17.2 per cent; Q2 at 7.0 per cent; Q3 at 4.3 per cent; and Q4:2022-23 at 4.5 per cent. Besides, CPI inflation projection for 2021-22 is retained at 5.3 percent, with Q4 at 5.7 per cent. On the assumption of a normal monsoon in 2022, CPI inflation for 2022-23 is projected at 4.5 per cent with Q1:2022-23 at 4.9 per cent; Q2 at 5.0 per cent; Q3 at 4.0 per cent; and Q4:2022-23 at 4.2 per cent, with risks broadly balanced.

The CNX Nifty is currently trading at 17625.10, up by 161.30 points or 0.92% after trading in a range of 17427.15 and 17636.70. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 2.32%, ONGC up by 2.29%, Tata Steel up by 2.26%, Kotak Mahindra Bank up by 2.23% and HDFC up by 1.95%. On the flip side, BPCL down by 1.61%, Maruti Suzuki down by 1.14%, Indian Oil down by 0.62%, Shree Cement down by 0.53% and Coal India down by 0.24% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted strengthened 186.29 points or 1.03% to 18,338.05, Nikkei 225 surged 116.21 points or 0.42% to 27,696.08, Hang Seng increased 94.36 points or 0.38% to 24,924.35, Straits Times advanced 12.85 points or 0.38% to 3,432.89, Shanghai Composite gained 5.96 points or 0.17% to 3,485.91 and KOSPI was up by 3.08 points or 0.11% to 2,771.93. On the flip side, Jakarta Composite was down by 10.97 points or 0.16% to 6,823.64.

European markets were trading higher, UK’s FTSE 100 increased 12.25 points or 0.16% to 7,655.67, France’s CAC increased 13.73 points or 0.19% to 7,144.61 and Germany’s DAX was up by 68.90 points or 0.45% to 15,550.91.