M&M, Wipro, Tech Mahindra, Bharti Airtel, and Infosys were the top gainers in the Nifty 50. While SBI Life Insurance and Tata Consumer Products were the only major losers in the Nifty 50 on June 07 as markets moved to all-time highs.

Commenting on the Dollar Rupee Outlook Indian Rupee Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas said that depreciated by 0.07% today on surge in crude oil prices and selling pressure from FIIs. However, weak US Dollar and positive tone in the domestic markets supported the Rupee at lower levels. US Dollar fell on disappointing labour market data which hinted as cooling jobs markets, making a case for interest rate cut by the US Federal Reserve in 2024. ADP non-farm employment added 152,000 jobs in May 2024 vs 188,000 jobs in April 2024 and expectations of 173,000 jobs. However, ISM services PMI rose unexpectedly to 53.8 in May 2024 vs 49.4 in April 2024, which provided some support to the Dollar.

Choudhary also added We expect Rupee to trade with a slight negative bias on worries over rising crude oil prices and as FIIs continue to sell in the markets. However, positive tone in the domestic markets as NDA is expected to come back to power for the third consecutive term, raising optimism over policy continuity may support the Rupee at lower levels. Traders may take cues from weekly unemployment claims and trade balance data from the US. Investors may remain cautious ahead of RBI’s monetary policy decision tomorrow. USDINR spot price is expected to trade in a range of Rs 83.20 to Rs 83.80.

The BSE Sensex hit a new high of 76,795.31 jumping over 1,650 points or 2.5%. While the NSE Nifty 50 is just 18 points away from a fresh high.

Shares of Rail Vikas Nigam Ltd. (RVNL) rose by up to 3% during Friday’s trading session following the state-run company’s announcement of securing a ₹495 crore order from the National Thermal Power Corporation (NTPC).

The NSE Nifty Midcap 100 hit 53,200 and was trading at an intra-day high jumping 780 points.

“Given this overarching setting, the RBI did well to hold the rates steady and keep the stance unchanged by a majority of 4:2. The raising of the GDP growth forecast by 20 bps to 7.2 % augurs well for the Indian economy and was, therefore, cheered by the stock market. Banks have been rightly advised not to be so aggressive on credit, particularly unsecured loans because ‘we are closely monitoring the incoming data to ascertain if further measures are necessary.’

The Governor did well to stress, while we do consider the impact of monetary policy in advanced economies on Indian markets, our actions are primarily determined by domestic growth-inflation conditions and the outlook. Rate cuts are unlikely before October 2024,” said Manoranjan Sharma, Chief Economist at Infomerics Ratings.

Wipro’s stock rose by 5.5% after securing a $500 million deal with a US Communication Service Provider. The company will provide services and solutions for five years. Wipro’s stock has also seen a 9% increase in the last five days and a 16% increase in the past six months, outperforming the Nifty 50 index, which only saw a 0.3% increase in the last five days.

“We maintain that the RBI will not precede the Fed in any policy reversal in CY24 and policy management will have to stay vigilant amid the fluidity of global narratives. Anchor rates like the RBI policy rate change will likely be a story from 1QCY25, assuming Fed cuts shift to next year. However, other factors like liquidity could keep RBI on tenterhooks on policy management. But liquidity management will be a story next few month,” said Madhavi Arora, Lead Economist at Emkay Global Financial Services.

Shares of Paytm, One97 Communications, rose 10%, freezing in the upper circuit at Rs 381.30. The stock touched its 52week high of Rs 998.30 on October 20, 2023.

“The Governor explicitly mentioned that the RBI does look at the global Central Banks’ policies, but the RBI’s monetary policy is primarily determined by domestic fundamentals. This, as we have highlighted many a times, is the most apt position and an explicit mention will certainly help guide market expectations.

RBI committed to bring bank inflation at 4% on durable basis.

Overall, we continue to believe that rate cuts in India could happen only in late CY24 or early 2025, based on domestic and global economic growth (inflation doesn’t seem to be a significant policy variable at this stage). Also, we continue to believe that India’s real GDP growth could be 6.5% in FY25, lower than RBI’s projection,” said Nikhil Gupta, Chief Economist at MOFSL Group.

Courtesy: BSE

“RBI’s verdict to maintain the repo rate comes as no surprise on the backdrop of uncertain global scenario, mainly the geo-political tensions that have been a constant concern, thereby stressing the need to be vigilant during these times. With FY25 CPI inflation forecast has been kept unchanged at 4.5% followed by softness in inflation in Q2 FY25 brings in a mild relief, however, spillover risk will remain a pressure point in the second half of FY25. However, the GDP growth projection for FY25 having increased to 7.2% from the earlier 7% showcases and infuses a belief that the country’s growth story will continue to remain robust, thereby strengthening the disposable income and purchasing power of the buyers. But, with current global economic instability, a muted growth in trade activities of gems and jewellery could be seen until the scenario gains stability,” said Colin Shah, MD of Kama Jewelry.

Courtesy: NSE

The NSE Nifty 50 was up 374.65 points or 1.64% at 23,196, while the BSE Sensex was up 1,334.85 points or 1.78% at 76,409.36.

“While a decoupling is on across the Atlantic — the European Central Bank (ECB) began cutting rate on Thursday even as the US Federal Reserve keeps it higher for longer — the Reserve Bank of India (RBI) has preferred to stand pat, in line with consensus.

The Fed has elbow room to pursue tight monetary policy because growth in the US is robust, while Europe is on the other side, with growth concerns amid elevated inflation.

The RBI, too, has policy space to keep rates higher and rein in Consumer Price Index-based (CPI) inflation to its stated goal of 4%.

The RBI has kept its inflation forecast this fiscal unchanged at 4.5%. However, it remains more optimistic of growth, revising up GDP growth by 20 basis points to 7.2%. CRISIL’s estimate is a tad lower at 6.8%.

We now see the RBI cutting rates starting October and have lowered our expectation to two rate cuts against three foreseen earlier,” said Dharmakirti Joshi, Chief Economist at CRISIL.

“Given the tone of the MPC statement and the expectation of stronger domestic growth, we believe that there is a low likelihood of any rate cut by RBI in the current calendar year,” said Suman Chowdhury, Chief- Economist and Head of Research at Acuité Ratings & Research.

Foreign Portfolio Investors have turned net sellers in the domestic market since the start of FY25, with net outflows of $5 billion till June 5. Specifically, FPIs recorded outflows of Rs 18,109.44 crore in June 2024 and Rs 35,692.19 crore in April 2024.

Courtesy: NSE

Courtesy: NSE

Food inflation still big worry for RBI; The Governor said the forecast of above normal monsoon augurs well for the Kharif Crop outlook. Assuming a normal Monsoon – CPI for FY25 projected at 4.5%.

RBI Governor Shaktikanta Das announced that the MPC decided to keep the stance of ‘withdrawal of accommodation’.

He said that the MSF and SDF rates remained unchanged at 6.75% and 6.25% respectively.

RBI Maintains the repo rate unchanged at 6.50% in line with estimates

Tech stocks rallied on June 07 during early trading hours. In the Nifty 50, all the top five stocks were of technology companies: Wipro, LTIMindtree, Infosys, Tech Mahindra, and HCL Tech. With Wipro outperforming all of them, rising as much as 5% to reach an intraday high of Rs 484.45.

“Crude oil exhibited significant price volatility and extended its gains after the European Central Bank cut interest rates by 25 basis points for the first time since 2019. This week, both the Bank of Canada and the ECB lowered interest rates in their policy meetings amid easing inflation and as a measure to boost demand. Additionally, crude oil prices recovered due to weakness in the dollar index and U.S. bond yields. OPEC+ also clarified on Thursday its policy decision to restore production from October onwards, further supporting crude oil prices. We expect crude oil prices to remain volatile in today’s session. Crude oil has support at $74.70–74.10 and resistance at $75.90–76.50. In INR, crude oil has support at Rs 6,250–6,190 and resistance at Rs 6,390–6,460,” said Rahul Kalantri, Vice President of Commodities at Mehta Equities.

Shares of Inox Wind will attract attention on Friday following an increase in its circuit filter price band from 10% to 20%. This adjustment allows the stock to potentially increase or decrease by up to 20% in a single trading session, compared to the previous 10% limit.

Shares of Adani Ports and SEZ rose almost 2% to an intraday high of Rs 1,379.45 during the early trading hours as the company received a letter of intent for the operation and maintenance of a container terminal at Kolkata Port. The order is for “Deployment, Operation, and Maintaining of equipment for container handling operations in Kolkata Dock System (KDS), Syama Prasad Mookerjee Port, Kolkata,” said the company in an exchange filing.

Wipro, LTIMindtree, Tech Mahindra, ONGC, and Infosys are the top gainers on NSE Ni9fty 50, whereas the top laggards include IndusInd Bank, JSW Steel, ITC, Eicher Motors, and L&T.

The NSE Nifty 50 opened 0.03% lower at 22,814.10, while the BSE Sensex opened 0.05% higher at 75,036.51.