Closing Bell: Nifty ends above 17,600, Sensex gains 460 pts after RBI keeps rates unchanged

Nifty trades with positive momentum for the Feb series. Support is placed at 17070 levels. Above 17500, open interest build-up is seen only at the 18000 strikes indicating possible resistance. FII segment has witnessed unwinding in the index options segment which is supportive of the positive bias.

On the sector front, we see value in the two-wheeler and BFSI space. Most of the frontline stocks trade in momentum and hence risk defined trading is suggested. Select energy stocks have broken trend levels and we expect underperformance/weakness in the space.

After a quiet start ahead of US inflation data and state elections back home, indices recovered smartly post the accommodative stance of the RBI which held rates status quo.

As the volatility index cooled off, metals led the rally well supported by real rstate & mortgage companies in the broader market. Buoyed by a lower inflation forecast going forward, the rally percolated to IT & Financials in afternoon trade.

The domestic market maintained its upward momentum aided by strong global cues and positive RBI policy. Though the market expected RBI to moderate its policy tone, the central bank surprised with a super dovish statement by maintaining its accommodative stance, modest inflation forecast and GDP growth of 7.8% in FY23.

Global market rallied ahead of the release of the US inflation data backed by healthy earnings results.

On the daily chart a small bodied green candle with a significant lower wick is visible. On the higher end Nifty recovered about 80% of the previous fall and paused before any further movement. Going forward, the index may remain sideways to negative as long as the index sustains below 17635. On the lower end support is visible at 17330.

: Market continues the winning streak on third day after RBI’s Monetary Policy Committee (MPC) kept the key interest rates unchanged and continued with its accommodative stance in it policy meeting on February 10.

At close, the Sensex was up 460.06 points or 0.79% at 58926.03, and the Nifty was up 142 points or 0.81% at 17605.80. About 1491 shares have advanced, 1761 shares declined, and 103 shares are unchanged.

ONGC, Tata Steel, Infosys, SBI Life Insurance and HDFC Bank were the top Nifty gainers, while losers were Maruti Suzuki, BPCL, Shree Cements, IOC and UltraTech Cement.

All the sectoral indices ended in the green with IT, bank, power, metal up 1 percent each. BSE midcap and smallcap indices ended flat.

Dr Lal PathLabs has reported 39.6 percent fall in its Q3 net profit at Rs 58.2 crore versus Rs 96.3 and revenue was down 0.3 percent at Rs 497 crore versus Rs 498.4 crore, QoQ.

Earnings before interest, tax, depreciation and amortization (EBITDA) was down 23 percent at Rs 109 crore versus Rs 141.5 crore and margin was at 22 percent versus 22.45, QoQ.

Dr Lal PathLabs was quoting at Rs 2,929.00, down Rs 30.75, or 1.04 percent.

Market gains for the third day, here are the 4 factors fuelling the rally

The RBI’s dovish policy stance was the main driver for the market, as MPC left key lending rates unchanged... Read More

RBI delivered an ultra-dovish policy by maintaining a status quo on the policy rates and the stance. The status quo has triggered strong rally in sovereign bonds, with benchmarks yields retreating from the recent highs. It clearly conveys that RBI is quite committed to orderly evolution of yields, notwithstanding the headwinds in the form of inflationary pressure, hawkish Fed and a large Indian government borrowing plan for FY23.

Its stance is backed by its expectation of easing of price pressures by end of the fourth quarter of FY22. This dovish policy is in line with our view that RBI will support growth and not turn hawkish for as long as it can, considering that the US Fed is looking to taper and raise its rates.

Hindustan Aeronautics’ Q3 net profit was up 9.4 percent at Rs 933.4 crore versus Rs 853.5 crore and revenue was up 8.6 percent at Rs 5,892 crore versus Rs 5,426 crore, YoY.

Earnings before interest, tax, depreciation and amortization (EBITDA) rose 18 percent at Rs 1,427 crore versus Rs 1,209 crore and margin was at 24.2 percent versus 22.3 percent, YoY.

Hindustan Aeronautics Ltd. was quoting at Rs 1,399.65, down Rs 14.85, or 1.05 percent on the BSE.

Nilkamal has posted 38.5 percent fall in Q3 net profit at Rs 33.4 crore versus Rs 54.3 crore and revenue was up 20.7 percent at Rs 756.4 crore versus Rs 626.6 crore.

Earnings before interest, tax, depreciation and amortization (EBITDA) was down 23.7 percent at Rs 74.1 crore versus Rs 97.2 crore and EBITDA margin was at 9.8 percent versus 15.5 percent, YoY.

Nilkamal was quoting at Rs 2,303.65, down Rs 8.15, or 0.35 percent on the BSE.

The central bank keeping the key rates and policy stance unchanged is on expected lines. It is the right move as it will help sustain growth as the economy battles the challenges posed by the latest wave of the pandemic. The market has clearly cheered the RBI policy, the central bank has shown no sign of nervousness with regard to the government's borrowing program.

The central bank viewing the current inflation as transitory indicates easy monetary policy for a longer period of time. Elevated crude prices and the new variant of COVID19 remain a key risk to growth going forward.

Net profit went down 39.7% at Rs 176.4 crore against Rs 292.6 crore (YoY). Revenue slipped 3.2% at Rs 1,272 crore against Rs 1,314.3 crore (YoY).

EBITDA was down 30% at Rs 255.6 crore against Rs 365.1 crore (YoY). EBITDA margin at 20.1% against 27.8% (YoY).

US revenue was down 23% at Rs 393 crore against Rs 512 crore (YoY). India revenue was up 17% at Rs 488 crore against Rs 418 crore (YoY).

API revenue fell 7% at Rs 198 crore against Rs 214 crore (YoY).

The stock was trading at Rs 761.10, up Rs 7.35, or 0.98 percent.