Sensex gains 89 points, Nifty holds 17,350 as RBI hikes repo rate by 50 bps
It was a wild ride for the markets on Friday as a hawkish monetary policy by the Reserve Bank of India (RBI) led to a tug of war between bulls and bears. While an in-line repo rate hike of 50 basis points gave ammunition to the bulls, bears tried to drag the indices as inflation projections were maintained for fiscal 2022-23 (FY23) despite three consecutive rate hikes.
Overall, the S&P BSE Sensex oscillated within a band of 405 points during the day, hitting a high of 58,649, and a low of 58,244. The index ended at 58,388, up 89 points or 0.15 per cent. The Nifty50, on the other hand, closed 16 points, or 0.09 per cent, higher at 17,397 levels.
In the broader market, the BSE MidCap and SmallCap indices added up to 0.2 per cent. Among sectors, the Nifty Auto index fell over 1 per cent, bogged down by Balkrishna Industries (down 7 per cent), and M&M (2 per cent). On the upside, the Nifty IT index gained 0.6 per cent.
Rate-sensitive stocks hogged the limelight as Manappuram Finance soared nearly 10 per cent, clocking its biggest intra-day gain in recent times. Meanwhile, shares of State Bank of India were up 1.5 per cent and were seen inching towards a new historic peak; automobile major Bajaj Auto and realty player DLF were trading with modest gains.
The rate hike signaled the entire reversal of the Covid-era cuts. The latest rate action takes the total tally of rate hikes since May to 140 basis points. Accounting for introducing the SDF at a higher rate than the reverse repo rate in April, effective rate hikes stand at 180 bps in 2022.
Shares of Bhagiradha Chemicals hit a record high as the stock soared by over 11%. The shares ended 11.5 per cent higher and hit record high in trades on Friday, on a healthy outlook. The stock has surged over 70 per cent from its low of Rs 736.30 touched on June 21, 2022.
Shares of Balkrishna Industries fell nearly 7% on earnings disappointment. The management commentary suggests Q2FY23 to be weak (QoQ decline) due to sluggish demand prospects in Europe and US.
Karur Vysya Bank extended its rally and hit an over two-year high as investors cheered the lender’s strong earnings with improved asset quality for the quarter ended June 2022.
Mahindra & Mahindra slipped 2 per cent on profit-taking after the auto major reported over 7-fold jump in Q1 consolidated net at Rs 2,360.72 crore; Total income grew 48 per cent to Rs 28,412 crore.
Shares of Tata Elxsi hit a record high of Rs 9,425 on rallying 5 per cent on the National Stock Exchange (NSE) in Friday’s trade due to a strong growth outlook.
Here are some picks from the week gone by.
