Bucking the trend in other regional markets, domestic equity benchmarks of the Bombay Stock Exchange and the National Stock Exchange added to their gains of past three sessions, mainly on account of rise in demand for banks shares by market participants.

There was a buzz in Dalal Street that the Reserve Bank of India would further lower its short-term lending rate (repo rate) by as much as 60 basis points in the current fiscal to lend support to the government’s efforts to tide over economic slowdown that has been reflected in the latest macro data such as IIP, PMI and exports.

Advertisement

The Sensex and the Nifty pared some of their intraday gains but ended in green terrain. The Sensex settled for the day at 39,215.64 points, registering an increase of 84.60 points or 0.22 per cent. In the Sensex pack, 14 stocks moved up and 16 were down. The Nifty closed at 11,687.50 points, up 24.90 points or 0.21 per cent. In the Nifty pack, 21 shares ended in green, 27 in red and two remained unchanged. The Nifty Bank finished at 30,735.50 points, up 164.70 points or 0.54 per cent.

day included SBI at Rs 373.00, up 2.40 per cent; Tech Mahindra at Rs 691.20, up 2.32 per cent and Kotak Mahindra Bank at Rs 1,531.55, up 1.93 per cent.

Brokerages are, however, excited by the jump in demand for the 10-year benchmark government bonds ever since the finance minister, Ms Nirmala Sitharaman, proposed to raise $10 billion by its sale abroad to foreign investors. Bond market dealers say the Budget proposal is receiving encouraging response from debt market investors domestic as well as off-shore. According to the latest data, so for $1.1 billion investment has flown into debt market. Foreign portfolio investors or FPIs have locked in $2.5 billion in debt in 2019 so far. The 10-year bond yield today further eased to 6.2496 per cent intra-day from Tuesday’s closing of 6.34 per cent. Since April, it has declined by 100 basis points and may slip below 6 per cent, feel dealers.

Japanese rating and research agency Nomura’s Indian affiliate Nomura India, in a report, said it sees the 50- scrip Nifty of NSE at 12,900 points by March 2020, driven by pick-up in investment cycle on lower bond yields as it values market at 17x (times) FY21 forward earnings (from 16x) to arrive at Nifty target of 12,900 which is the upside of nearly 9 per cent from current levels.

Nomura India’s chief researcher S Mukherjee said steps taken by the government and the RBI to infuse liquidity into the non-banking finance companies or NBFCs should allay fears of escalation of credit crisis. This in turn could restrict deepening of economic slowdown. Nomura is “overweight” on financials/banks, infrastructure and healthcare stocks.

Meanwhile, marketing agency Nielsen has predicted slowdown for FMCG (fast moving consumer goods) sector in the current fiscal as it sees its growth declining from 10-11 per cent to 9-10 per cent owing to sharp fall in rural demand.

Financials continue to dominate trade in Dalal Street. HDFC AMC’s latest earnings prompted Bank of America Securities to raise its stock target price from Rs 1,850 to Rs 2,200/stock. The company reported a net profit growth of 12.2 per cent in Q1 at Rs 292 crore. AUM or asset under management of the company has increased by 18 per cent year-on-year to Rs 3.16 lakh crore. Among all mutual funds, its market share stood at 14.7 per cent.