Daily Equity Market Report – October 30, 2013

India Inc. today accepted the central bank’s tough measures as a Dipawali gift despite the hike in repo rate and went on buying spree across broad-based stocks. Both the benchmark indices, Sensex and Nifty, almost paired all the losses incurred in the few previous trading sessions since last week. Nifty surged higher to close above intermediate resistance level of 6200 as sentiment turned bullish after the RBI hiked repo rate. The 50-share index ended at 6220.90, up 119.80 points or 1.96% after touching intra-day high of 6228.05 and a low of 6079.20. While, the S&P BSE Sensex closed at 20929.01, up 358.73 points or 1.74% and touched a high of 20952.55, just 75 points away from all-time closing high, and an intraday low of 20,493.66.

Sentiments in the market turned bullish today after the RBI, in the second quarter monetary policy review, hiked repo rate by 25 basis points to 7.75% and cut marginal standing facility rate by 25 basis points to 8.75% with immediate effect, which was in-line with economists' expectations. Addressing the key issue of liquidity for India Inc, RBI doubled the borrowing limit of banks against their cash positions or NDTL to 0.5% for both 7-day and 14-day repos, with immediate effect to increase liquidity in the system. With these changes, the RBI has calibrated the window between the repo rate (7.75%) and MSF (8.75%) to 100 basis points (1%), as stated in the September 20 mid-quarter review.

It was the measures taken on the front of liquidity in the markets in form of MSF and short-term borrowing limit of the banks that bolstered the optimism among the participants. Though RBI also reduced the growth forecast for the current fiscal to 5% from 5.5% projected earlier.

All the sectoral indices today joined the party on NSE and Bank Nifty emerged as the biggest gainer surging by 4.35% and followed by CNX PSU Bank (3.87%), CNX Finance (3.74%), CNX Realty (2.71%), CNX MNC (2.65%), CNX Auto (2.36%), CNX Service (2.31%), CNX Metal (2.25%) and CNX Commodities (2.04%).

Market breadth was positive on the NSE as 677 stocks advances against 481 declines and 58 remained unchanged.

Out of 50 stocks of Nifty, 47 stocks gained while 3 declined.

Top Five Nifty Gainers: Maruti led the Nifty Gainers list and excelled by 8.75% and accompanied by J P Associates (7.76%), ICICI Bank (6.26%), IndusInd Bank (5.63%) and Axis Bank (5.16%).

Top Five Nifty Losers: Today only three stocks on the Nifty closed in red with Ranbaxy plunging the most by -0.90% and chased by ITC (-0.29%) and Bharti Airtel (-0.13%).

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