BENCHMARKS TRADE WITH TINY LOSSES; VIX CLIMBS 3.31%

The benchmark indices traded with small losses in the early afternoon trade. The Nifty traded near the 22,500 mark. Pharma shares advanced after declining in the past 3 consecutive trading sessions.

At 12:30 IST, the S&P BSE Sensex, was down 19.3 points or 0.03% to 74,208.44. The Nifty 50 index shed 9.25 points or 0.04% to 22,505.40.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.42% and the S&P BSE Small-Cap index gained 0.50%.

The market breadth was strong. On the BSE, 2,305 shares rose and 1,390 shares fell. A total of 132 shares were unchanged.

RBI Monetary Policy Outcome:

The Reserve Bank of India (RBI) monetary policy committee (MPC) has voted to keep the repo rate unchanged at 6.5%. This is the seventh time that the 6 member Monetary Policy Committee has decided to keep the key rates unchanged.

RBI`s MPC at its meeting today, 5 April 2024, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The real GDP growth for 2024-25 is projected at 7% with Q1 at 7.1%; Q2 at 6.9%; Q3 at 7%; and Q4 also at 7%. The CPI inflation for 2024-25 is projected at 4.5% with Q1 at 4.9%; Q2 at 3.8%; Q3 at 4.6%; and Q4 at 4.5%.

RBI Governor Shaktikanta Das elaborated on the decision, stating that inflation has decreased from its peak of 5.7%. He noted favorable growth-inflation dynamics and a steady decline in core inflation, reaching its lowest point in nine months. Despite volatile food inflation in February, core inflation, excluding food and fuel, has shown a downward trend. Concerns remain regarding the impact of weather variations on inflation and economic stability.

The minutes of the MPC�s meeting will be published on 19 April 2024. The next meeting of the MPC is scheduled during June 5 to 7, 2024.

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, jumped 3.31% to 11.59. The Nifty 25 April 2024 futures were trading at 22,573.85, at a premium of 68.45 points as compared with the spot at 22,505.40

The Nifty option chain for the 25 April 2024 expiry showed maximum Call OI of 31.1 lakh contracts at the 22,500 strike price. Maximum Put OI of 38.2 lakh contracts were seen at 22,000 strike price.

Buzzing Index:

The Nifty Pharma index rose 0.66% to 19,251.10. The index shed 0.43% in the past three trading sessions.

Ipca Laboratories (up 2.57%), Torrent Pharmaceuticals (up 1.71%), Alkem Laboratories (up 1.6%), Laurus Labs (up 1.28%), Dr Reddys Laboratories (up 1.23%), Granules India (up 1.23%), Zydus Lifesciences (up 1.22%), Glenmark Pharmaceuticals (up 1.07%), Mankind Pharma (up 1.01%) and Lupin (up 0.8%) advanced.

On the other hand, Sanofi India (down 1.49%), Gland Pharma (down 0.74%) and Cipla (down 0.67%) edged lower.

Stocks in Spotlight:

Cipla shed 0.67%. The drug major said that the US drug regulator has issued Form 483, with six observations after inspecting its Patalganga manufacturing facility in Maharashtra.

IndusInd Bank shed 0.51%. The private lender`s net advances jumped 18% to Rs 3,42,857 crore as of 31 March 2024 as compared to Rs 2,89,924 crore as of 31 March 2023.

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