Benchmarks trade with fervor after cooling off from day’s high

Although off day’s high, benchmark equity indices continued to trade with fervor as investors turning bullish post RBI’s policy review, are steadily adding up their positions in risky equities. In a new year gift to the markets, Reserve Bank of India (RBI), in its December mid-quarter monetary policy Review, delivered the unexpected and maintained a status quo stance on its key policy rates as it left the policy repo rate and reverse repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75% and 6.75% respectively. Making the most of this positive news, rate sensitive stocks, like banking, Realty and Auto, have made it to the list of top gainers. However, with across the board buying activities, none of the sectoral indices are trading in red. Trading with gains of over a percent, Sensex and Nifty, are comfortably cruising past the crucial 20,800 and 6,200 levels respectively. In the global markets, Asian pacific shares were trading mixed as investors wait to hear when the U.S. Federal Reserve will begin unwinding its stimulus campaign, a major driver for global risk assets in recent years.

Closer home, the BSE Sensex is currently trading at 20849.06, up by 239.92 points or 1.15% after trading in a range of 20917.57 and 20568.70. There were 24 stocks advancing against 6 declines on the index. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1217:859; while 151 shares remained unchanged.

The broader indices too added more gains; the BSE Mid cap and Small cap indexes were trading up by 0.96% and 0.58% respectively.

Amidst the across the board buying activity, none of the sectoral indices were down in red. Nevertheless, the top gaining sectoral indices on the BSE were, Realty up by 3.11%, Capital Goods up by 2.53%, bankex up by 1.96%, Oil & Gas up by 1.82% and Auto up by 1.23%.

The top gainers on the Sensex were BHEL up by 3.20%, L&T up by 2.92%, Hero MotoCorp up by 2.91%, SBI up by 2.71% and HDFC up by 2.71%. On the flip side, Jindal Steel was down by 1.53%, SSLT was down by 1.16%, Tata Motors down by 0.53%, ITC down by 0.29% and HUL down by 0.21% were the top losers on the Sensex.

Meanwhile, in a positive surprise for the markets, Reserve Bank of India (RBI), delivered the unexpected, as it left the policy repo rate and reverse repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75% and 6.75% respectively. Further, the cash reserve ratio (CRR) of scheduled banks remains unchanged at 4.0% of net demand and time liability (NDTL). Meanwhile, Marginal Standing Facility and Bank rates continues to remain at 8.75%.

However, despite maintaining a status quo, RBI underscored that it will have to act, if the expected softening of food inflation does not materialise and translate into a significant reduction in headline inflation in the next round of data releases, or if inflation excluding food and fuel does not fall.

The CNX Nifty is currently trading at 6,208.95, up by 69.60 points or 1.14% after trading in a range of 6,236.00 and 6,129.95. There were 41 stocks advancing against 8 stock declines on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were DLF up by 4.51%, IndusInd Bank up by 4.17%, PNB up by 4.05%, BHEL up by 3.40% and Hero Motocorp up by 2.95%. On the flip side, Jindal Steel down by 1.31%, SSLT down by 1.01%, Tata Motors down by 0.56%, Ranbaxy down by 0.51% and ITC down by 0.35%, were the top losers on the index.

The Asian equity indices were trading mixed; Hang Seng rose 0.30%, Jakarta Composite added 0.06%, Nikkei 225 surged 2.02%, and Seoul Composite gained 0.45%. On the flip side, Shanghai Composite declined 0.33%, Straits Times slipped by 0.10%, Taiwan Weighted edged lower by 0.05% and KLSE Composite slid 0.16%.