SENSEX 16189.36 +34.74
NIFTY 4873.90
+07.90
USD/INR 0051.36 -00.07
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UPDATEDTIME 09.28 PM 16 JANUARY 2012
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The National Stock Exchange's Nifty ended a choppy session in
the positive terrain led by gains in capital goods, technology and auto stocks.
According to dealers, the decline in WPI inflation to two-year low at 7.47 per cent against 9.11 per cent a year ago helped the markets bounce back on hopes of some kind of monetary easing by the Reserve Bank of India at its policy meet this month.
However, analysts are of the view that the central bank will continue to keep the rates unchanged and will use open market operations to inject liquidity rather than cutting CRR rates.
Today's inflation report does not meaningfully alter our expectation from the RBI in the near term. While generally weak growth momentum is increasing pressure on the RBI to ease monetary policy, persistently high inflation continues to act as a deterrent to any rapid change in policy rates.
That would leave the central bank vulnerable to criticism if there were further upside surprises in inflation. Our base case calls for a cut in the policy rate from Q2 12. However, we acknowledge that the chances of the easing cycle starting in March have increased significantly of late.
Given the rising concerns about growth and the continued tightness in liquidity, we believe that the RBI will continue to inject liquidity into the system using open market operations (OMOs). A reduction in the cash reserve ratio (CRR) at the January policy meeting appears unlikely, in our view.
A cut at this time could be perceived as a dilution of the RBI's inflation-fighting stance, which the central bank would possibly like to avoid at the moment. Indeed, such a view has recently been aired by senior policymakers, including Deputy RBI Governor Subir Gokarn and the Prime Minister's Economic Advisory Council Chairman Dr. C. Rangarajan.
The Nifty closed at 4873.90, up 7.90 points or 0.16 per cent. It touched a high of 4880.80 and low of 4827.05 in trade today.
The Bombay Stock Exchange's Sensex ended at 16189.36, up 34.74 points or 0.22 per cent. The 30-share index touched low of 16037.60 and high of 16214.36 intraday.
BSE Midcap Index was down 0.03 per cent and BSE Smallcap Index moved 0.33 per cent higher.
Amongst the sectoral indices, BSE Capital Goods Index gained 2.07 per cent, BSE IT Index was up 1.80 per cent and BSE Auto Index moved 0.78 per cent higher. BSE Oil&gas Index was down 1.71 per cent, BSE Healthcare Index declined 0.62 per cent and BSE Realty Index slipped 0.52 per cent.
According to dealers, the decline in WPI inflation to two-year low at 7.47 per cent against 9.11 per cent a year ago helped the markets bounce back on hopes of some kind of monetary easing by the Reserve Bank of India at its policy meet this month.
However, analysts are of the view that the central bank will continue to keep the rates unchanged and will use open market operations to inject liquidity rather than cutting CRR rates.
Today's inflation report does not meaningfully alter our expectation from the RBI in the near term. While generally weak growth momentum is increasing pressure on the RBI to ease monetary policy, persistently high inflation continues to act as a deterrent to any rapid change in policy rates.
That would leave the central bank vulnerable to criticism if there were further upside surprises in inflation. Our base case calls for a cut in the policy rate from Q2 12. However, we acknowledge that the chances of the easing cycle starting in March have increased significantly of late.
Given the rising concerns about growth and the continued tightness in liquidity, we believe that the RBI will continue to inject liquidity into the system using open market operations (OMOs). A reduction in the cash reserve ratio (CRR) at the January policy meeting appears unlikely, in our view.
A cut at this time could be perceived as a dilution of the RBI's inflation-fighting stance, which the central bank would possibly like to avoid at the moment. Indeed, such a view has recently been aired by senior policymakers, including Deputy RBI Governor Subir Gokarn and the Prime Minister's Economic Advisory Council Chairman Dr. C. Rangarajan.
The Nifty closed at 4873.90, up 7.90 points or 0.16 per cent. It touched a high of 4880.80 and low of 4827.05 in trade today.
The Bombay Stock Exchange's Sensex ended at 16189.36, up 34.74 points or 0.22 per cent. The 30-share index touched low of 16037.60 and high of 16214.36 intraday.
BSE Midcap Index was down 0.03 per cent and BSE Smallcap Index moved 0.33 per cent higher.
Amongst the sectoral indices, BSE Capital Goods Index gained 2.07 per cent, BSE IT Index was up 1.80 per cent and BSE Auto Index moved 0.78 per cent higher. BSE Oil&gas Index was down 1.71 per cent, BSE Healthcare Index declined 0.62 per cent and BSE Realty Index slipped 0.52 per cent.
Maruti Suzuki (4.38%), BHEL (3.64%),
Larsen & Toubro (3.03%), State Bank of India (3.03%), and IDFC
(2.90%) were the major Nifty gainers.
Reliance Power (-3.30%), NTPC (-2.68%), Kotak Bank (-2.45%), Reliance Industries (-2.26%), and HDFC Bank (-2.03%) were the major losers.
The oil ministry's technical arm, Directorate General of Hydrocarbons, has told the government it cannot stop Reliance Industries from recovering costs incurred in the D6 block because it does not have the power to initiate the enabling resolution in the management committee for the block.
Market breadth was negative on the NSE with 504 gainers against 581 losers.
Reliance Power (-3.30%), NTPC (-2.68%), Kotak Bank (-2.45%), Reliance Industries (-2.26%), and HDFC Bank (-2.03%) were the major losers.
The oil ministry's technical arm, Directorate General of Hydrocarbons, has told the government it cannot stop Reliance Industries from recovering costs incurred in the D6 block because it does not have the power to initiate the enabling resolution in the management committee for the block.
Market breadth was negative on the NSE with 504 gainers against 581 losers.
Regards
RAKESH MAKIN
+91,
9041667797(DIRECT), 9915684997
OFF
0172-4657997
PANCHKULA (Haryana).
Email:makin_97@yahoo.com
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