“MY NAME IS RAGHURAM RAJAN, AND I DO WHAT I DO”
US indices ended mixed yesterday with the Dow and S & P 500 rising 0.3% and 0.1% respectively on the back of gains in commodity prices while Nasdaq, pressured by persisting weakness in biotech shares and Apple, lost 0.6%.
Nymex oil rose 80 cents or 1.8% to $45.23 a barrel and copper held higher. Gold fell $5 to $1127 an ounce.
S&P/Case-Shiller's 20-City Index reported a 5% rise in July, roughly in-line with estimates. The September consumer confidence index came in at 103.0, topping August's read of 101.3.
London-listed commodity firm Glencore closed up nearly 17% in London trade, after plunging nearly 30% Monday to extend recent losses amid concerns about debt levels for the commodities and trading giant.
European markets ended with cuts of upto 0.8%. Volkswagen fell 4.1% after reports that it's push to secure tax breaks that kick-started a market for its new diesel cars could now help U.S. investigators build a case against it for deceiving the government about their emissions.
Earlier Chinese stocks fell more than 2% and Nikkei tumbled 4%.
After falling a percent and third in the first hour of trade, benchmark indices saw a mammoth 3% rebound from the bottom of the day on the back of a surprise 50 bps rate cut by RBI, but gave away some of the gains in last hour to end higher by six tenth of a percent. Sensex settled at 25779, up 162 points while Nifty rose 48 points to finish at 7843. BSE mid-cap index gained 0.4% while the small-cap index lost 0.1%. BSE Realty index and Bankex gained the most among the sectoral indices, rising 2% and 0.9% respectively while Metal and Healthcare indices were the top losers, giving away 1.4% and 0.9% respectively.
As against the widely expected 25 bps figure, RBI surprised the market by cutting the repo rate by 50 bps to a four-year low of 6.75%. The apex bank lowered its FY16 GDP growth target to 7.4% from 7.6% and said that the focus should now shift to bringing inflation down to 5% by FY17 end. Governor Raghuram Rajan said the RBI intends to be as accommodative as possible given its inflation targets and with this 50 basis points rate cut, he has front-loaded action.
RBI also allowed foreign investors to buy an additional $18.2 billion in government bonds in stages over the next few years, as part of measures to open up domestic markets.
FIIs net sold stocks and index futures worth Rs 1113 cr and 519 cr respectively but net bought stock futures worth rs 135 cr. DIIs were net buyers to the tune of Rs 876 cr.
Rupee appreciated 8 paise to end at 65.96/$.
State Bank of India cut base rate by 40 basis points to 9.3%, making it lowest in the country.
Today morning Asian markets are trading with gains of upto 2% with Nikkei leading the tally and SGX Nifty is suggesting about 30 points higher opening for our market.
Yesterday, Nifty, after plunging to 7691 in the initial trade, surged all the way to 7926, but gave up some gains to end at 7843. 7926 and 7691, the top and bottom made yesterday, would be the immediate resistance and support level to eye. A crossover of 7926 would take the benchmark in the vicinity of major 8100 hurdle. A breach of 7691 would open up the possibility of the retest of the 7540 bottom.
Traders are advised to wait for the breach of 7926-7691 range for taking a fresh view.