Markets trade flat after RBI policy; Nifty tests 15,700; Auto, Metal outperform; Tata triplets, Coal India top bulls; Bajaj twins weigh

Except for financial stocks, all other sectoral indices were in the green.

Jun 07, 2021 09:06 IST India Infoline News Service

Indian markets began this week's trading session on a subdued note as focus shifts towards major economic data after RBI's monetary policy. RBI kept the policy repo rates unchanged that was already discounted by the markets. Investors now eye for CPI, WPI and factory output data going forward. The slowdown in the Covid-19 pandemic plays a positive role in keeping bears at the bay in stocks. Except for financial stocks, all other sectoral indices were in the green.

At around 09.48 am, Sensex was performing at 52,106 up by 5.95 points or 0.01%. The benchmark has touched an intraday high and low of 52,279.55 and 52,062.71 respectively.

Same time, Nifty 50 was performing at 15,700.10 higher by 29.85  points or 0.19%. The 50-scrip benchmark has clocked an intraday high and low of 15,728.20 and 15,678.10 respectively.

Coal India and Tata Motors led the rally on Nifty 50 strengthening by nearly 3% each. Tata Consumer Products, UPL and Tata Steel followed with 2% upside each.

On the contrary, Bajaj and HDFC twins emerge as major bears of the markets. Bajaj Finance took the top spot in the underperformers list plummeting by 4.5% followed by parent Bajaj Finserv tumbling over 3%. HDFC followed with more than 1% downside. HDFC Life slipped by 0.6%, while Asian Paint dipped marginally.

In terms of sectoral indices, Nifty Metal and Auto outperformed benchmarks and other sectoral indices by soaring 1% each. Nifty Financial Services were only laggard of the opening bell.

On an expected line, RBI maintained yet another 'status quo' in its policy repo rate at 4%. This would be the sixth consecutive time where RBI kept the benchmark interest rate unchanged. Likewise, the reverse repo rate stood unchanged at 3.35%, while MSF and Bank rate continued to be at 4.25%.

RBI governor Shaktikanta Das said, "The forecast of a normal south-west monsoon, the resilience of agriculture and the farm economy, the adoption of COVID compatible operational models by businesses, and the gathering momentum of global recovery are forces that can provide tailwinds to the revival of domestic economic activity when the second wave abates. On the other hand, the spread of COVID-19 infections in rural areas and the dent in urban demand pose downside risks. Ramping up the vaccination drive and bridging the gaps in healthcare infrastructure and vital medical supplies can mitigate the pandemic’s devastation."

The MPC also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

On the global front, Asian markets witnessed a mixed trend with Hong Kong stocks worst hit. Investors optimism cooled down over the U.S. jobs report and was replaced with cautions about inflation data scheduled for later this week. Meanwhile, participants also gauge for more data from China as exports are set to report jump, seeing more legs to mid-caps. Also, a resurgence in coronavirus in Taiwan dampened sentiments further.

Furthermore, investors were chary about major technology firm stocks after G7 agreed on a minimum global corporate tax rate of at least 15%. Also, receiving the approval of the whole G20 is expected as a tall order.

However, most equity markets globally seemed overbought with much overdue correction round the corner.

Last week on Friday, at the Wall Street, US markets settled with modest gains as jobs numbers come less than expected which reduces the threat of rising yields & sees technology stocks stage a smart comeback. Bond yields fall to 1.57% even as US$ slips to 90. Oil prices also see declines after the smartest week in the last 2 years. 

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