Sensex settles 284 points higher post RBI policy; Tata Steel, Tata Motors top gainers
Vinod Nair, Head of Research, Geojit Financial Services
The gradual tightening by RBI with a focus to get a balance between inflation and growth has given energy to the market. Mid & small caps outperformed as investors find value buying opportunity after the recent nosedive correction. Progressing monsoon and positive outlook on rural economy is giving boost to the economy, which is already showing signs of improvement.
Mustafa Nadeem, CEO, Epic Research on rate-sensitive stocks
The rate hike by RBI will have a marginal impact on rate-sensitive sectors as they are prone to the rates but in the long run we are expecting them to fade out since this hike has been considered on the back of various perspectives like global commodity prices, especially crude, the MSP hikes and the recent uncertainty in global markets with a rise in US Yield. The committee also made a point very clearly for upside tick in inflation. While in Realty we have seen some improvements and demand pick up in last few quarters while most interest rates in this sector are of floating rate, so we don't see any effect in medium to long term while in short term it may dampen the sentiments.
The automobile sector is seeing a volume growth in two digits while the higher borrowing cost can be passed on but given the overall growth story of this sector, we are not seeing any red flag or concern that needs to change our bullish outlook on the sector. As far as banking is concerned we expect these rate hikes to be short-term in nature and doesn't wave a flag of concern in medium to long term. It will be important to see the crude prices and August meeting since we don't expect any rate hike then if outlook and scenario improve over time.
Nifty hits 10,800
The Sensex and Nifty hit their three-week high with the banking stocks leading the gains a day after the Reserve Bank of India (RBI) raised its policy rate for the first time in over four years. At 1:10 pm, the Sensex was trading at 35,575, up 396.94 points, while the broader Nifty50 was ruling at 10,801, up 117.30 points.
McLeod Russel, Videocon Industries among top stocks that will remain in focus today
Aditya Birla Fashion: Aditya Birla Fashion & Retail has allotted 5,843 fully paid-up Equity Shares of Rs. 10/- each ('said shares') pursuant to the exercise of Stock Options under the ESOS-2013. The said shares will rank pari passu with the existing Equity Shares of the Company in all respects.
Redington (India) (Buy)
Target: Rs 120
Stoploss: Rs 114
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Asian Markets Today
Asian shares rose to 2 1/2-month high on Thursday, supported by strong economic fundamentals, while expectations the European Central Bank could start to wind down its stimulus boosted the euro and global bond yields. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent to extend its gains, hitting a 2-1/2 month high for a second straight day.Japan's Nikkei average rose 0.7 percent to 22790.68 in early trade.
The euro rose to a two-week high, while the 10-year U.S. Treasury yield hit a 1-1/2-week peak on Wednesday, after officials said the European Central Bank could wind down its stimulus programme by the end of the year.
Wall Street On Thursday
Wall Street indexes rallied on Wednesday with help from financial stocks as investors eyed strong economic data and trade war fears took a back seat while the Nasdaq registered its third straight record closing high.
The Dow Jones Industrial Average rose 346.41 points, or 1.4 percent, to 25,146.39, the S&P 500 gained 23.55 points, or 0.86 percent, to 2,772.35 and the Nasdaq Composite added 51.38 points, or 0.67 percent, to 7,689.24.
The Sensex and Nifty extended gains after RBI hiked interest rate by 25 basis points as experts believe the move was already factored in, while Street cheered there was no change to neutral stance of the policy. At 3:00 pm, the Sensex was trading at 35,217, up 314.62 points, while the broader Nifty50 was ruling at 10,691, up 98.30 points.