The Nifty and the Sensex opened the day with marginal losses but managed to recuperate them to trade higher in the green.
The Reserve Bank of India's monetary policy committee has unanimously voted to keep lending rates unchanged this morning.
Join us as we follow the top business news through the day.
Sensex jumps over 200 points after RBI policy outcome; financial stocks rise
An update on how stocks traded since morning.
PTI reports: "Equity benchmark Sensex jumped over 200 points in the morning session on Friday after the Reserve Bank of India (RBI) monetary policy announcement.
RBI has decided to keep benchmark interest rate unchanged at 4 per cent but retained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.
After announcement of the monetary policy review, the 30-share BSE index was trading 235.28 points or 0.59 per cent higher at 40,417.95, and the NSE Nifty rose 57.15 points or 0.48 per cent to 11,891.75.
HDFC was the top gainer in the Sensex pack, rising around 3 per cent, followed by ICICI Bank, L&T, Bajaj Finance, HDFC Bank, Bajaj Finserv, SBI and Axis Bank.
On the other hand, Asian Paints, Tech Mahindra, HUL, Bajaj Auto and TCS were among the laggards.
Rate-sensitive banking and financial stocks were trading on a positive note, with BSE bankex and finance rising up to 1.68 per cent. Realty index was also quoting gains, while auto was in the red.
According to traders, RBI’s decision was on expected lines.
The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, RBI Governor Shaktikanta Das said while announcing the decisions taken by the Monetary Policy Committee (MPC).
Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI.
Das said the Indian economy is entering into a decisive phase in the fight against coronavirus.
He also stated that the contraction in economic growth witnessed in the April-June quarter of the fiscal is “behind us” and that silver linings are visible."
Google Pixel 4a launched at introductory price of ₹29,999
Google on Friday announced its Pixel 4a smartphone will be available in India from October 16 at a special launch price of ₹29,999. The company also announced a special launch price of ₹6,999 for its Nest Audio smart speaker.
Both devices will be available on Flipkart as part of the e-commerce platform’s ‘Big Billion Day’ Sale. While the Pixel 4a, whose MRP is ₹31,999, will continue to be available on Flipkart, Nest Audio (with an MRP of ₹7,999) will also be available soon at retail outlets such as Reliance Retail and Tata Cliq.
The U.S.-headquartered firm recently announced the global launch of Pixel 4a, along with two new 5G-enabled devices — Pixel 4a 5G and Pixel 5. However, the two 5G devices will not be introduced in India.
The Pixel 4a is based on the Qualcomm Snapdragon 730G mobile platform and has Google’s Titan M security module for on-device security. It comes with 6GB of RAM and 128GB of storage and is powered by a 3140 mAh battery that the company claims will last all day.
Words in econ textbooks
RBI keeps benchmark interest rates unchanged, sees GDP contracting by 9.5% in FY2020-21
The monetary policy committee of the Reserve Bank of India has unanimously decided to keep the key lending rates unchanged, Governor Shaktikanta Das said on Friday.
The MPC voted unanimously to leave the policy repo rate unchanged at 4%. The MPC also decided to continue with its accommodative policy stance till as long as required this year and next year, he said.
“After the steep decline into which global economy plunged in second quarter of this year, there’s a rebound in activity in the third quarter but it is not even,” Mr. Das observed.
The Indian economy is entering a decisive phase in the fight against COVID-19. By all indications, the deep contractions of Q1 2020-21 are behind us. Silver linings are among us, Mr. Das said adding that he always “dared to be an optimist.”
The focus must now shift from containment to revival, Mr. Das said.
Rupee rises 15 paise to 73.09 against US dollar in early trade
The RBI's policy decision seemed to boost the rupee against the US dollar.
PTI reports: "The rupee gained 15 paise to 73.09 against the US dollar in early trade on Friday as the Reserve Bank of India decided to keep benchmark interest rate unchanged.
At the interbank forex market, the rupee opened at 73.21 against the American currency, gained some ground to touch 73.09, up 15 paise from its previous close.
On Thursday, the rupee closed at 73.24 against the US dollar.
Maintaining status quo for the second time in a row, Reserve Bank of India (RBI) on Friday decided to keep benchmark interest rate unchanged at 4 per cent but retained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.
On the prices front, RBI Governor Shaktikanta Das said inflation is likely to ease to projected target by the fourth quarter of this fiscal.
On the growth front, Das said gross domestic product (GDP) growth may break out of contraction and enter the positive zone by the fourth quarter of the current fiscal.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.15 per cent to 93.46.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 66.97 points higher at 40,249.64, and the broader NSE Nifty rose 24.45 points to 40,249.64.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 978.37 crore on Thursday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.16 per cent to USD 43.27 per barrel."
RBI keeps benchmark lending rate unchanged at 4%
Highlights from the RBI Governor's press meet after the monetary policy committee meet:
* RBI to maintain accommodative monetary policy stance to support growth
* Indian economy entering into decisive phase in fight against coronavirus
* Contraction in economic growth of Q1 behind us; silver linings are visible
* Focus must shift from containment to reviving economy
* Inflation likely to ease to projected target by Q4 of FY’21
* Modest recovery in 1st half of year could further strengthen in 2nd half; economic activity to gain traction in Q3
* GDP growth may break out of contraction and enter positive zone by Q4 of current fiscal
* GDP to contract by 9.5 per cent in the current fiscal
* RBI to maintain comfortable liquidity position; Rs 20,000 crore-OMO auction next week
Q2 records 107% surge in fresh investments
Fresh investment proposals surged sharply in the second quarter of this year, rising 107% over the first quarter, with 2,219 new projects entailing an investment of ₹2.19 lakh crore.
Private sector investments also recovered significantly, rising 87% from the previous quarter when an extensive lockdown triggered a 23.9% contraction in the economy.
On a year-on-year basis, fresh investments between July and September were still 11.32% lower, but marked a sharp recovery from investments in the first quarter that were nearly 73% lower.
Among the States, Chhattisgarh received the highest investments in the second quarter followed by Tamil Nadu, which had topped fresh investments in the first quarter, according to Projects Today’s latest report on investment announcements in the July to September quarter. Karnataka was third in the list followed by Gujarat and Maharashtra.
Sensex rises over 100 points ahead of RBI policy outcome
The benchmark indices managed to trade with gains after opening with minor losses.
PTI reports: "Equity benchmark Sensex jumped over 100 points in opening trade on Friday ahead of the Reserve Bank of India’s monetary policy decision.
The 30-share index was trading 103.44 points or 0.26 per cent higher at 40,286.11, and the NSE Nifty rose 34.85 points or 0.29 per cent to 11,869.45.
Tata Steel was the top gainer in the Sensex pack, rising around 3 per cent, followed by Bharti Airtel, L&T, M&M, Bajaj Finance and HDFC.
On the other hand, HUL, Reliance Industries, TCS, Nestle India and Tech Mahindra were among the laggards.
In the previous session, Sensex ended 303.72 points, or 0.76 per cent, higher at 40,182.67, while the broader Nifty climbed 95.75 points, or 0.82 per cent, to finish at 11,834.60.
Exchange data showed that foreign institutional investors bought equities worth Rs 978.37 crore on a net basis on Thursday.
According to Arjun Mahajan, Head - Institutional Business - at Reliance Securities, Indian equities continue to look resilient at the moment ahead of the Reserve Bank’s monetary policy outcome as it would be crucial for the Banking, financial services and insurance (BFSI) sector and markets.
While the Monetary Policy Committee (MPC) may keep policy rates unchanged, market would be keenly watching out commentary of policy documents especially pertaining to MPC stance, GDP and inflation outlook, he noted.
Fading uncertainty about outcome of presidential election in the US along with prospects of the largest fiscal stimulus after election bolstered investors’ confidence and aided Wall Street to close higher, he said.
Bourses in Shanghai, Hong Kong and Seoul were trading on a positive note in mid-session deals, while Tokyo was in the red.
International oil benchmark Brent crude was trading 0.35 per cent lower at USD 43.19 per barrel."
World Bank widens GDP contraction forecast to 9.6%
The World Bank expects India’s economy to contract by 9.6% in 2020-21, revising its earlier estimate in June that output will shrink by just 3.2% amidst the COVID-19 pandemic. This revision reflects ‘the impact of the national lockdown and the income shock experienced by households and firms’, the Bank explained.
In its South Asia Economic Focus report released on Thursday, the Bank reckoned there will be a rebound to 5.4% growth in 2021-22, but largely due to base effects and hinging on assumptions that the pandemic-related restrictions are completely lifted by 2022.
India’s gross domestic product (GDP) contracted 23.9% in the first quarter of this year and official estimates for the second quarter are expected at end-November. The Bank mooted continuation of critical reforms to reverse the sudden and steep impacts of COVID-19.