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Stock markets rise even with RBI leaving rates unchanged
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SME Times News Bureau | 06 Aug, 2020
Despite a status quo in key lending rates, the Indian equity indices made healthy gains on Thursday.
The gains came on the back of the Reserve Bank's positive outlook and accommodative stance in its monetary policy decision.
The equity market opened gap up and remained positive for most part of the session.
In
terms of global indices, major Asian markets closed on a mixed note,
while European indices like the FTSE, CAC and DAX have ended lower.
Sector-wise,
the top gainers were the BSE IT, FMCG, CD and Metal indices, whereas
BSE Telecom, Capital Goods and Power indices lost ground.
The
Nifty50 on the National Stock Exchange closed at 11,200.15, higher by
98.50 points or 0.89 per cent from its previous close. Similarly, the
S&P BSE Sensex closed at 38,025.45, gaining 362.12 points or 0.96
per cent from its previous close of 37,663.33. It opened at 37,946.80
points and touched an intra-day high of 38,221.40 and a low of
37,755.10.
"Technically, with the Nifty remaining in uptrend
after a volatile session on the back of the RBI monetary policy event,
we expect the Nifty to move higher in the coming sessions," said Deepak
Jasani, Head of Retail Research at HDFC Securities.
"The uptrend
could accelerate once the immediate highs of 11,257 are cleared.
Crucial supports to watch for any trend reversal are at 11,064."
Jasani
also pointed out that banking stocks reacted positively to the MPC
outcome despite no rate cut as the feared extension of moratorium has
not happened and they will be spared of the requirement of high
provisions if by September 30, the new committee's recommendations are
implemented.
"The overall market is also excited by the prudent
measures implemented. However, the markets lack triggers and or flows
to take it higher and hence, may keep running into resistances," Jasani
said.
According to Vinod Nair, Head of Research at Geojit
Financial Services: "Indian benchmark indices came off highs but still
closed out a volatile day with gains, following RBI commentary regarding
interest rate outlook."
Siddhartha Khemka, Head, Retail
Research, Motilal Oswal Financial Services, said: "The market might
continue its positive movement in the near term, with more stock
specific action as the earnings season progresses. Investors would now
be awaiting announcement of US stimulus which could bring cheer to the
market."
"However we find the risk-reward unattractive at the
current levels and we would advise investors to remain defensive in
their portfolio approach. Traders, on the other hand, are advised to
stay cautious and keep booking profit at regular intervals."
On
Thursday, the Reserve Bank retained its key short-term lending rates,
but maintained its growth-oriented accommodative stance. Accordingly,
the Monetary Policy Committee of the central bank maintained the repo
rate or short-term lending rate for commercial banks, at 4 per cent.
Likewise, the reverse repo rate stands unchanged at 3.35 per cent.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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