3:30 pm Market close:
The market ended with some very strong gains. The Sensex was up 728.73 points
or 2.7 percent at 28075.55, and the Nifty ended up 216.60 points or 2.6 percent
at 8494.15. About 1693 shares advanced,
1206 shares declined and 322 shares were unchanged.
3:10 pm Acche din
aa gaye? Confident that RBI's decision to cut interest rates would give a major
fillip to the economy, Chief Economic Advisor Arvind Subramanian today said it
signals a shift in the policy stance and direction going forward. "It will
provide a fillip to the economy, both directly and indirectly," he said,
adding that directly it will increase spending by private sector - both
consumers and firms- and indirectly it should help by improving both balance
sheets of private sector and banks. It's a really welcome move and consistent
with the strong ongoing disinflationary pressures in the economy."
It is a significant move because it signals a shift in the
stance and direction of policy going forward," Subramanian added. The
Chief Economic Advisor said that the RBI Governor Raghuram Rajan had earlier
said he does not want to cut rates and therefore this rate cut is consistent
with strong disinflationary pressures. However, any further rate cut will be
depend on aggregate demand on economy, he added.
2:50 pm MF exposure
to banks: The mutual fund industry
is betting big on banking stocks as its equity exposure to the sector climbed
to an all-time high of nearly Rs 73,000 crore in December. This also marks the
third consecutive rise in MF industry's exposure to banking stocks. MFs collect
funds from various investors for investing in securities such as stocks, bonds,
money market instruments and similar assets.
Their investments in banking stocks stood at Rs 72,835 crore
as on December 31, 2014, accounting for 21.88 per cent of their total equity
assets under management (AUM) of Rs 3.33 lakh crore, according to data
available with the Securities and Exchange Board of India (Sebi). The previous
high was November this year when investment in the sector surged to Rs 70,575
crore. MFs had been raising their exposure to banking shares since January but
their investment level in the sector dropped in September.
2:40 pm Market
outlook: Hailing the Reserve Bank’s move to pare repo rate by 25 basis
points , Raamdeo Agrawal, joint managing director, Motilal Oswal Financial
Services, says the cut was imminent for the Indian market due to global
deflation and fall in inflation. In an interview t Agrawal says the rate cut
will give a momentum to the economy and he sees more rate cuts in the upcoming
days. “But don’t try to time the market,” advises Agrawal who believes that
retail investor participation will now increase significantly. “Though we may
not get very large foreign instituitional investor (FII) flows, if we get USD
15 billion from FIIs and a similar figure from domestic instituitional investor
(DIIs), then we’ll still be very comfortable,” he adds.
2:36 pm Market check:
The Nifty has hit 8500, up 230.30 points or 2.8 percent at 8507.85. The Sensex
is up 781.86 points or 2.9 percent at 28128.68. About 1718 shares have
advanced, 1069 shares declined, and 320 shares are unchanged.
HDFC is up 6 percent while SBI and ICICI Bank are up 5
percent each.
02:15pm More rate
cut possible? Brokerage house Morgan Stanley says a big rate cut cycle is
underway, and it sees the RBI cutting interest rates by 125 basis points over
the next 12 months.
It sees the RBI cutting the repo rate by 25 basis points
more at its monetary policy review on February 3.
“We expect the RBI to front load the rate cuts by
potentially taking up a 50bps rate cut in one of the monetary policy meetings
after February 3,” said the Morgan Stanley note to clients, penned by Chetan
Ahya and Upasana Chachra.
“Our rate cut forecasts is predicated on our view that CPI
inflation will stay at closer to 5% in most of the calendar year 2015, as the
reduction in fiscal deficit, sustained deceleration in rural wages and lower
global commodity prices will mean that inflationary pressures in the economy
will be contained,” said the note.
02:00pm Market Check
Bulls are in complete control of the street today as the
frontline indices rallied 2.5 percent each and the rupee touched two-month high
in afternoon trade after the Reserve Bank of India surprised the market with
rate cut.
The 30-share BSE Sensex gained 693.94 points at 28040.76 and
the 50-share NSE Nifty rallied 206.05 points to 8483.60 while the broader
markets underperformed benchmarks. The BSE Midcap and Smallcap indices climbed
1.5 percent and 1.2 percent, respectively.
About 1627 shares have advanced, 1095 shares declined, and
327 shares are unchanged on the Bombay Stock Exchange.
The Reserve Bank of India slashed repo rate by 25 basis points
to 7.75 percent and left cash reserve ratio unchanged at 4 percent ahead of its
February policy meeting.
BSE Realty Index topped the buying list among sectoral
indices, up 8 percent followed by Bankex with 3.5 percent upside. HDFC, ICICI
Bank, L&T, SBI and M&M rallied 4-6 percent.
Meanwhile, the Indian rupee jumped to 61.48 a dollar, the
highest level since November 2013. The currency appreciated by 65 paise to
61.52 a dollar.
Telecom Regulatory Authority of India (TRAI) has rejected
Department of Telecommunications' proposal for higher 3G price of Rs 3,899
crore and reiterated its old stance on 3G spectrum price. Bharti Airtel and
Idea Cellular gained more than a percent while Reliance Communications and Tata
Teleservices climbed nearly 4 percent.
In the broader space, Atul surged 7 percent as US FDA has
approved its Dapsone manufacturing facility in Valsad, Gujarat. More
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