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After opening flat, benchmark Indian equity indices gained momentum as RBI in its bi-monthly Monetary Policy Committee (MPC) maintained status quo in key policy rates. On an intraday basis, Sensex hit 52,389 and the Nifty 50 touched a new peak at 15,733. However, indices came off their day’s highs and were trading flat with Sensex at 52,225 down 7 points or -0.01%, the Nfity 50 index was trading with marginal gains of 2 points at 15,692.
L&T, ONGC, Asian Paints, HDFC and M&M were top gainers on the Sensex rallying up to 2%. On the downside, Nestle India, HDFC Bank, SBI, HUL & Titan lost in the range of 0.50-1.13%.
RBI policy
The Reserve Bank of India (RBI) has kept the repo rate, the rate of interest at which commercial banks borrow money from the central bank, at 4% for the last five meetings of the MPC.
The reverse repo rate, the rate of interest that banks charge for parking their funds with the RBI, is at 3.35%.
While maintaining an accommodative stance to support the economy RBI revised FY22 real GDP growth projection to 9.5% — 18.5% in Q1, 7.9% in Q2, 7.2% in Q3 and 6.6% in Q4. The earlier projection for GDP was at 10.5%.
“Unlike the first wave of Covid-19 where economy came to a standstill, economic impact during the second wave will be contained,” RBi Governor Shaktikanta Das said. CPI inflation has been projected at 5.1% in FY22 — 5.2% in Q1, 5.4% in Q2, 4.7% in Q3 and 5.3% in Q4.
That apart, Das said a separate liquidity window of Rs 15,000 crore will be opened till March 31 for the contact-intensive sector.
Reserve Bank of India will buy Rs 40,000 crore of govt securities on June 17. Rs 1.20 lakh crore G-Sec will be purchased in Q2, Das informed.
Expert view
“In an expected move, RBI maintained the status quo in policy rates. To support and revive the economy, RBI would continue with the accommodative stance as long as it is needed. The Governor cautioned about the factors that could put upward pressure on inflation. The announcement of G-SAP 2.0 at INR 1.2 lakh crore for Q2FY22 shows RBI’s commitment to keeping the bond yields in check. The inclusion of SDL on G-SAP would support state government borrowings from the market,” said Deepthi Mathew, Economist at Geojit Financial Services.
Earnings today
Punjab National Bank, Bharat Forge, Bank Of India, Jubilant Pharmova, Varroc Engineering, MOIL, Paisalo Digital, IOL Chemicals & Pharmaceuticals, NIIT, Jai Corp, Gufic Biosciences, Asahi Songwon Colors, Pennar Industries and others will be announcing their quarterly results today.
Stocks in spotlight
Bharti Airtel informed that ICRA has reaffirmed [ICRA]AA- (Stable) issuer rating of the company. However, since the company, presently has no instrument-rated under this rating, ICRA has withdrawn this rating at the company’s request.
M&M said that the Ministry of Defence signed a contract with M/s Mahindra Telephonics Integrated Systems Ltd., Mumbai for procurement of 11 Airport Surveillance Radars with Monopulse Secondary Surveillance Radar for Indian Navy and Indian Coast Guard on June 03, 2021. The procurement, at a cost of Rs 323.47 crore, will be made under the ‘Buy & Make’ category.
Lupin announced the launch of the authorized generic version of Brovana (arformoterol tartrate) Inhalation Solution 15 mcgꝉ/2 mL, unit-dose vials, of Sunovion Pharmaceuticals Inc.
DCB Bank announced a revision in Marginal Cost of Funds based Lending Rate (MCLR) with effect from June 5, 2021.
ABB Power Products and Systems India said that the operations at the manufacturing facility of the company situated in Peenya, Bengaluru, Karnataka have resumed from May 28, 2021.
BEML has started manufacturing 960 LPM Medical Oxygen Plants at its KGF complex in record time under a ToT agreement with M/s. Defence Bio-Engineering & Electro Medical Laboratory (DEBEL), Bengaluru under DRDO.
Global markets
Overseas, Asian stocks are trading lower on June 4 after U.S. equities sagged amid robust economic data that stoked concerns about a pullback in central bank stimulus.
US stocks ended lower on Thursday, though they came off lows on signs President Joe Biden may be willing to compromise on corporate taxes. Strong U.S. jobs data and record service-sector growth underscored the recovery from the pandemic.