Key benchmark indices pared gains in mid-afternoon trade as profit booking emerged at higher levels. The Nifty gave up 11,200 mark. Trading was volatile due to weekly expiry of index options.
At 14:22 IST, the barometer index, the S&P BSE Sensex, was up 232.35 points or 0.62% at 37,895.46. The Nifty 50 index was up 73.3 points or 0.66% at 11,175.
In broader market, the S&P BSE Mid-Cap index rose 0.71% while the S&P BSE Small-Cap index rose 0.91%.
The market breadth was strong. On the BSE, 1491 shares rose and 1072 shares fell. A total of 163 shares were unchanged.
Total COVID-19 confirmed cases worldwide stood at 18,752,917 with 706,761 deaths. India reported 5,95,501 active cases of COVID-19 infection and 40,699 deaths while 13,28,336 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
RBI MPC Outcome:
The six-member monetary policy committee (MPC), headed by RBI governor Shaktikanta Das, kept repo rate untouched at 4%; and reverse repo rate at 3.35% while maintaining the accommodative stance. The MPC had convened the three-day meeting on Tuesday, 4 August.
RBI governor Shaktikanta Das said inflation is expected to stay elevated in Q2 FY21 but it is likely to ease in H2 aided by favourable base effects. Real GDP growth will remain in the negative, Das said. However, he added that any positive news on the COVID-19 containment efforts would change this scenario. RBI is taking measures to enhance liquidity support, further ease financial stress.
Das said Rs 10,000 crore additional liquidity facility will be provided by NHB (National Housing Bank), NABARD (National Bank for Agriculture and Rural Development).
RBI has decided to permit one-time restructuring of corporate loans. The details of this exercise will be spelt out by a committee headed by veteran banker KV Kamath. Das said a window under the 7 June 2020 stressed asset resolution framework will be provided which will enable lenders to implement a resolution plan, without a change in ownership.
With a view to mitigating the impact of COVID-19 on households, the RBI decided to increase the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery for non-agricultural purposes to 90% from 75% earlier and has this relaxation available till 31 March 2021.
Meanwhile, RBI has brought in startups and renewable energy sectors (including solar power and compressed bio-gas plants) into the purview of Priority Sector Lending (PSL). The RBI has also amended the priority sector guidelines to do away with regional disparity
Numbers to Track:
The yield on 10-year benchmark federal paper fell to 5.864% compared with previous closing of 5.826% in the previous trading session.
In the foreign exchange market, the partially convertible rupee was flat at 74.94.
In the commodities market, Brent crude for October 2020 settlement fell 21 cents to $44.967 a barrel. The contract rose 1.67% to end at $45.17 in the previous trading session.
MCX Gold futures for 5 August 2020 settlement gained 0.85% to Rs 55,568.
Stocks in Spotlight:
Federal Bank was up 0.29%. The bank entered into an agreement to purchase up to 4% stake in IDBI Federal Life Insurance Co., from IDBI Bank at a price not exceeding Rs 27.56 per equity share. The transaction is subject to regulatory approvals from Reserve Bank of India (RBI) and Insurance Regulatory and Development Authority (IRDAI). The deal is expected to be executed in 9 months. Federal Bank currently holds 26% stake in IDBI Federal Life Insurance Co, making it an associate of the bank. Post purchase, the total stake will increase up to 30%. The announcement was made during market hours today, 8 August 2020.
Inox Leisure was up 0.13%. The multiplex operator reported a consolidated net loss of 73.64 crore in Q1 June 2020 compared with net profit of Rs 27.01 crore in Q1 June 2019. Total income fell 99.4% to Rs 2.97 crore in the June quarter from Rs 496.13 crore in the corresponding period last year. Amongst the steps taken to reduce operational costs, the group has invoked the force majeure clause under various lease agreements for its multiplex premises, contending that rent and CAM (Common Area Maintenance) charges for the shutdown period on account of COVID-19 pandemic are not payable.