Market updates: Sensex closes 260 points lower at 30,672 as RBI measures fail to cheer investors

Closing bell

Equity benchmark BSE Sensex tumbled 260 points on Friday, dragged by losses in banking and financial stocks as RBI’s rate cut and other measures to prop up the economy failed to meet market expectations.

After falling over 450 points during the day, the 30-share index ended 260.31 points or 0.84 per cent lower at 30,672.59.

The broader NSE Nifty too settled 67 points or 0.74 per cent down at 9,039.25.

Axis Bank was the top laggard in the Sensex pack, plunging more than 5 per cent, followed by HDFC, Bajaj Finance, ICICI Bank, Tata Steel, Bajaj Auto, HDFC Bank and IndusInd Bank.

On the other hand, M&M, Infosys, Asian Paints, UltraTech Cement and Tech Mahindra were among the gainers.

Earlier in the day, the Reserve Bank of India unexpectedly slashed benchmark interest rates to their lowest levels since 2000 in an effort the revive the economy.

The repo rate was cut by 40 basis points to 4 per cent and the reverse repo rate was decreased to 3.35 per cent from 3.75 per cent.

The central bank also extended the three-month moratorium on loan repayments till August 31 and raised the limit on banks’ group exposure to companies.

“However, RBI has not announced any relief on the restructuring of loans to address the risk of rising asset quality issues in the banking sector, which has come as a disappointment for the equity markets,” said Gaurav Dua, Sr VP, Head Capital Market Strategy & Investments, Sharekhan by BNP Paribas.

Along with the adverse impact of the Covid-19 pandemic, the additional concerns related to US-China brinkmanship is creating uncertainties and accordingly, equities are expected to remain volatile with negative bias in the immediate term, he added.

India witnessed the biggest single-day spike with 6,088 Covid-19 cases, taking the tally to 1.18 lakh. The death toll rose to 3,583, according to the Health Ministry.

Globally, the number of cases linked to the disease has crossed 51 lakh and the death toll has topped 3.32 lakh.

Hong Kong led a sell-off across Asian equities after China introduced proposals to enact a national security law for the city.

Bourses in Shanghai, Tokyo and Seoul ended significantly lower.

Stock exchanges in Europe were trading on a negative note in early deals.

International oil benchmark Brent crude futures slipped 4.38 per cent to $34.48 per barrel.

On the currency front, the rupee depreciated 34 paise to provisionally close at 75.95 against the US dollar. - PTI

Company update:

Infosys said that a district court in the US has dismissed a lawsuit against the company and a few of its current and former officers.

In a statement released early on Friday, Infosys, the second-largest domestic IT services company, said in October 2019, a class-action lawsuit was filed in the United States District Court against the company and certain of its current and former officers. The complaint, which was filed in the Eastern District of New York, was brought on behalf of a class consisting of persons or entities who purchased the company’s publicly traded securities between July 7, 2018, and October 20, 2019, and alleged claims for violations of the US federal securities laws.

Weather update:

Many parts of the South Peninsula - including Kerala, Tamil Nadu and Karnataka – would receive thunderstorms, moderate to heavy rain, and squally weather - from this weekend even as strong incoming monsoon flows might throw up a rogue depression over the South-West Arabian Sea en route to Kerala.

India Meteorological Department (IMD) indicated that the depression may disrupt the monsoon flows and cause a part to head towards Yemen. But the IMD suggests that this would not be enough to prevent localised thunderstorms to invade the South Indian Peninsula farther to the East, as it waits the monsoon.

Nifty call:

Nifty 50 May Futures (8,980)

Taking weak cues from the Asian markets, Sensex and Nifty started the session in negative territory. After an initial rally, the benchmark indices resumed the down-move witnessing selling pressure at higher levels. The Nikkei 225 index has fallen 0.8 per cent to 20,388 and Hang Seng index has nose-dived almost 5 per cent to 23,068 levels in today's session.

IRCTC Update:

Indian Railways booked over 5.5 lakh passengers through 2.37 lakh tickets by afternoon for 100 regular trains, which will start from June 1, on the Indian Railways’ online ticket booking platform – Indian Railways Catering and Tourism Corporation (IRCTC).

These trains are in addition to the trains being run for migrant populations (Shram Shakti trains), and special AC-trains, introduced on May 12.

BSE update:

Company updates:

Maruti Suzuki India (MSIL) said it has partnered with Cholamandalam Investment & Finance Company Limited (CIFCL), to provide customised auto retail financing solutions to buyers.

The objective of this partnershipwith new solution called ‘Buy Now Pay Later Offer' is aimed to provide customers with easy financing options. The offer includes higher loan to value, up to 90 per cent on-road funding and longer repayment tenure.

Birla MF stops inflow into two debt schemes

In a rare investor-friendly move, Aditya Birla Mutual Fund has suspended fresh inflow into two of its debt schemes — Medium Term Plan and Credit Risk Fund, as it expects recovery in some of its investments that had gone bad earlier.

However, the fund house will continue to accept inflows through systematic investment plans (SIPs) and systematic transfer plans (STPs) registered before Thursday. Read more about it here.

Broker's call: UltraTech Cement (Accumulate)

CMP: ₹3,570.6

Target: ₹3,847

RBI Press meet:

Reserve Bank Governor Shaktikanta Das said the inflation outlook is highly uncertain due to the outbreak of the COVID-19 pandemic and expressed concern over elevated prices of pulses.

He also said there is a need to review import duties to moderate prices. - PTI

NSE Sectoral updates:

RBI Press meet:

The Reserve Bank of India (RBI) has cut the repo rate from 4.40 per cent to 4 per cent.

Forex update:

The dollar held gains against major peers as worries about renewed diplomatic tensions between the United States and China supported safe-haven demand for the greenback.

Sino-US relations have soured yet again over a broad range of issues, including China's treatment of the former British colony of Hong Kong and its response to the coronavirus pandemic, which is causing risk aversion to spread.

Oil Market update:

Oil prices were on the rise --heading for a fourth straight week of gains, amid more evidence that fuel demand is recovering as countries ease business and social restrictions that were imposed to counter the coronavirus pandemic.

Brent crude was up 14 cents, or 0.4%, at $36.20 a barrel by 0040 GMT, after gaining nearly 1% on Thursday. The contract is heading for a jump of more than 10% for the week.

Announcement: RIL

In its fifth fund raising in a month, Jio Platforms, a subsidiary of Asia's richest man Mukesh Ambani-controlled Reliance Industries Ltd (RIL), has raised Rs 11,367 crore from global investment firm KKR.

This is KKR’s largest investment in Asia and will translate into a 2.32 per cent equity stake in Jio Platforms on a fully diluted basis. KKR is making the investment from its Asia private equity and growth technology funds.

This transaction values Jio Platforms at an equity value of Rs 4.91-lakh crore and an enterprise value of Rs 5.16-lakh crore.

Asian market update:

Hong Kong shares tumbled on Friday after Beijing moved to impose a new security law on the city after last year's pro-democracy unrest, risking fresh protests and further straining fast-deteriorating US-China ties.

Hong Kong's Hang Seng index fell 3.7% to a seven-week low, helping to pull down MSCI's broadest index of Asia-Pacific shares outside Japan 1.2%.

Opening bell:

Inidces today opened on a negative note. The 30-pack BSE Sensex fell 262.36 points to 30,670.54 in opening session. Meanwhile, NSE Nifty dropped 74.10 points to 9,032.15.

Zeel, Infosys, Reliance were in the gainers list; Hindalco, Tata Steel were the laggards.

Today's stock pick:

The stock of Adani Gas jumped 5.6 per cent accompanied by above average volume on Thursday, decisively breaking above a key resistance at ₹110. This breakthrough provides investors with a short-term perspective an opportunity to buy the stock at current levels.

Day Trading Guide:

Given below are supports and resistances for Nifty 50 futures and seven key stocks that can help in your intra-day trading:

₹859 • HDFC Bank

₹672 • Infosys

₹188 • ITC

₹77 • ONGC

₹1440 • Reliance Ind.

₹151 • SBI

₹1991 • TCS

9075 • Nifty 50 Futures

S1, S2 : Support 1 & 2; R1, R2: Resistance 1 & 2.

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