Sensex Gains As RBI Holds Rates; Bank Nifty Rises To Record

Indian shares closed higher, led by gains in rate sensitive sectors such as financials and automakers after the central bank kept interest rates unchanged at a policy meeting, as widely expected.

The Reserve Bank of India left repo and reverse repo rates unchanged at 6.25 percent and 6 percent, respectively and lowered its inflation estimates for the current financial year.

The S&P BSE Sensex rose 0.26 percent to 31,271 while the NSE Nifty advanced 0.28 percent to 9,663.

Indian rupee rose 8 paise to 64.36 against the U.S. dollar, compared with its previous close of 64.43. The partially convertible currency is poised for its highest close since May 17.

In the bonds market, yield on the newly-issued 6.79% bonds due May 2027 dropped five basis points to 6.59 percent following the decision.

Among the sectoral indices, S&P BSE Bankex rose 0.73 percent while the S&P BSE Metal index gained nearly 1 percent.

The market breadth was skewed in the favour of gainers, with about 5 stocks advancing to every 4 stocks that declined.

• Sensex +0.25% at 31,265 vs 31,202 before policy
• Nifty +0.24% at 9,659 vs 9,639 before policy
• Rupee at 64.315 against the U.S. dollar vs 64.396 before policy
• Benchmark 10-year bond yields at 6.648 basis points vs 6.635% earlier

• Benchmark repurchase rate at 6.25% (Estimate 6.25%)
• Reverse repo rate at 6.00% (Estimate 6.00%)
• Says monetary policy stance neutral
• The central bank was expected to leave repurchase rate unchanged, according to all 10 economists in BloombergQuint survey

• Stock jumps over 18% intraday, the most since April 07
• Adds 25% to its market value in six trading sessions
• Volumes at 10.8 times its 20-day average
• Stock has returned 80% so far this year
• The construction company has a market cap of over Rs 2,600 crore

• S&P BSE Information Technology Index down 3.2%, the most since November 9, 2016
• Index snaps four sessions of gains
• Hexaware Technologies (-5.7%)
• Wipro (-3.5%)
• Tata Consultancy Services (-3.3%)
• Tech Mahindra (-2.7%)

• Kotak Institutional Equities have a cautious view on the stock as it believes most of the positives are already priced-in the share price
• Stock trades at 44.3 times estimated forward earnings per share vs 35 times for 2-year historical average: Bloomberg data
• Brokerage believes Titan would need to have 8-11% share of the overall jewelry market in India by FY2023 from about 3.5% in FY2017
• Rating cut to sell from reduce; target price at Rs 430 vs current price of Rs 531
• Stock +63% year-to-date vs +18% for S&P BSE Sensex

• Shares up as much as 20% to Rs 34.70, the most since May 18, 2009
• Future Enterprises may sell 50% stake in general insurance JV, CNBC TV-18 reported citing unidentified sources
• Company's debt expected to half post stake sale, the report said

• Shares rose as much as 8.1% to Rs 266, the most since October 5, 2015
• Unichem Labs' Gaziabad unit gets establishment inspection report from the U.S. FDA
• Analyst consensus price target is 35% above current price: Bloomberg data

• Gujarat Pipavav: 39 lakh shares change hands in two blocks
• Reliance Communications: 10 lakh shares change hands in a block
• Cyient: 16 lakh shares change hands in a block

* Buyers & sellers were not immediately known

• Indian rupee fell 8 paise to 64.51 against the U.S. dollar, extending drop to a second session
• The partially convertible rupee fell 7 paise against the American currency to end at 64.43 on Tuesday
• In the bonds market, yield on the newly-issued 6.79% bonds due May 2027 steady at 6.64%; it has dropped 11 basis points over the past three weeks

• Shares of the pharma supplier rose as much as 8.5% to Rs 113, the most since May 25
• Vivimed Labs said no observations received from the U.S. FDA following an inspection of its API plant in Spain
• Volume at 7.5 times its 30-day average

• Shares up as much as 4.8% to Rs 134.20, the highest since April 25
• Adani Group has made an application to help finance the development of the $16.5 billion Carmichael coal project, Bloomberg reported citing Minister for Resources and Northern Australia Matthew Canavan
• Group seeking loan from the Northern Australia Infrastructure Fund, the report said

• Shares of the telecom operator fell as much as 4.5% to a fresh record low of Rs 19.25
• Reliance Communications cut to RD from CCC by Fitch; cut to Ca by Moody’s, outlook negative
• Last week, company's short- and long-term debt was downgraded by rating agencies Moody's, Care Ratings and ICRA
• The telecom operator had a net debt of Rs 44,345 crore as of March 31

Indian shares edged higher, led by gains in metal stocks after five sessions of fall but caution remained ahead of the Reserve Bank of India's monetary policy review later in the day.

The S&P BSE Sensex rose 0.13 percent to 31,233 while the NSE Nifty gained 0.17 percent to 9,653.

Among the sectoral indices, S&P BSE Metal index advanced 0.8 percent while the S&P BSE consumer durables rose 0.5 percent.

The market breadth was skewed in the favour of gainers, with about 6 stocks advancing to every 3 stocks that declined.

• 2:30 pm: 2nd bi-monthly monetary policy statement for 2017-18
• 2:45 pm: RBI Governor Urjit Patel & deputy governors to hold a press conference
• 5 pm: RBI Governor & deputy governors to hold teleconference with analysts

All eyes are on RBI's credit policy and bankers have positioned themselves for a softer tone. Though the central bank is expected to leave the policy rate unchanged, many expect the RBI to lower inflation forecasts and dial back its rhetoric on price pressures.

48 out of the 50 analysts surveyed by Bloomberg expect a status quo on interest rates. The remaining two expect a cut in the repo as well as the reverse repo rate. None expect any change in the cash reserve ratio.

An update from the weather bureau yesterday that monsoon rain may be better than earlier predicted is also seen playing out positively and has boosted hopes of bankers that the RBI will tone down its hawkish stance and in turn push bond yields lower.

The rupee is seen opening weaker following its Asian peers and could see some pressure as the RBI has been buying dollars via state-run banks to keep the gains in check.

• Adani Power: Approves sale of Mundra power business to subsidiary.
• Reliance Communications: Fitch, Moody’s downgraded telecom operator again.
• Sical Logistics: Wins order from Mahanadi coal fields.
• Vivimed Labs: U.S. FDA inspection in Spain plant results in no observation for Vivimed Labs.
• Aegis Logistics: Sells stake in step-down subsidiary.

For a complete list of stocks, click HERE

• Bajaj Finance: Raised to buy at Goldman
• Bajaj Finserv: Raised to neutral at Goldman
• Bank of Baroda: Raised to neutral at Goldman
• HDFC: Raised to neutral at Goldman
• IIFL Holdings: Rated new outperform at Credit Suisse
• Jet Airways: Raised to buy at ICICIdirect, price target Rs 580
• Wipro: Cut to underperform vs hold at Jefferies
• LIC Housing: Cut to sell at Goldman
• Reliance Communications: Cut to RD from CCC by Fitch; cut to Ca by Moody’s, outlook negative

• India’s $60 billion in surplus liquidity signals RBI on hold
• India seen getting more monsoon rain amid lower El Nino odds
• SBI said to raise $2.3 billion in share sale priced at top end
• India notifies transactions exempted from application of STT
• DHL to expand India warehouses on e-commerce boom, new sales tax
• Global funds bought Rs 61.1 crore of local stocks; domestic funds sold Rs 360 crore on June 6: NSE Provisional data

Also Read: IMD Raises Monsoon Forecast On Possibility Of Weak El Nino

• RBI is widely expected to hold its benchmark interest rate steady on Wednesday
• Expect central bank to change its outlook on inflation for the rest of the year

Also Read: Five Questions That RBI Needs To Answer

Good Morning!

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