Mid Session Commentary

Sensex soars 960 pts, Nifty above 17,000 on positive global signals
(13:41, 30 Sep 2022)

The key equity indices marched higher in the afternoon trade, tracking positive global cues. Bargain hunting emerged after the Reserve Bank of India (RBI) today raised benchmark repo rate by 50 basis points, along expected lines. The Nifty crossed the 17,000 mark, reversing from the day's low of 16,747.70 in the early trade. Barring the Nifty IT index, all the sectoral indices on the NSE were in the green. Banks and financial services stocks rallied.

At 13:28 IST, the barometer index, the S&P BSE Sensex, surged 959.95 points or 1.70% at 57,368.91. The Nifty 50 index gained 279.25 points or 1.66% at 17,097.35. In the past seven sessions, both the indices dropped over 5.5% each.

In the broader market, the S&P BSE Mid-Cap index rose 0.98% while the S&P BSE Small-Cap index added 1.02%.

The market breadth was positive. On the BSE, 2159 shares rose and 1162 shares fell. A total of 122 shares were unchanged.

Hindalco Industries (up 4.73%), HDFC Bank (up 3.29%), Bajaj Finserv (up 3.23%), Kotak Mahindra Bank (up 3.13%) and IndusInd Bank (up 3.02%) were top Nifty gainers.

Asian Paints (down 0.90%), Britannia Industries (down 0.70%), Hindustan Unilever (down 0.69%), Wipro (down 0.43%) and TCS (down 0.38%) were major Nifty losers.

RBI Policy Outcome:

The Monetary Policy Committee (MPC) at its meeting today (30 September 2022) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.90% with immediate effect. The decision was on the expected lines.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.65% and the marginal standing facility (MSF) rate and the Bank Rate to 6.15%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The MPC projected that while inflation will average 6.7% in 2022-23, it will head lower in the next financial year.

Inflation is projected at 6.7% in 2022-23, with Q2 at 7.1%; Q3 at 6.5%; and Q4 at 5.8%, and risks are evenly balanced. CPI inflation for Q1:2023-24 is projected at 5%.

FY23 real GDP growth is seen at 7% from 7.2% earlier. Real GDP growth for Q2 2022-23 is projected at 6.3%; Q3 at 4.6%; and Q4 at 4.6%, and risks broadly balanced. For Q1:2023-24, it is projected at 7.2%.

The next meeting of the MPC is scheduled during 5-7 December 2022.

Global Markets:

The Dow Jones index futures were up 166 points, indicating a positive opening in the US market today.

European shares advanced while Asian shares ended on a mixed note on Friday.

China's official factory activity data unexpectedly expanded in August, beating estimates. China's official manufacturing Purchasing Managers' Index surprisingly grew in September to 50.1. The official non-manufacturing PMI came in at 50.6 in September, down from 52.6 in August.

Wall Street ended sharply lower on Thursday on worries that the US Federal Reserve's aggressive fight against inflation could hobble the US economy, and as investors fretted about a rout in global currency and debt markets.

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