Sensex and Nifty erased gains as RBI Monetary Policy Committee left the repo rate unchanged at 6.25%. Industry was expecting at least 25 basis point cut.

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%.

Nifty closed with a drop of 41 points and closed at 8,102, while BSE Sensex ended with a loss of 156 points at 26237.

On the global front, most Asian indices closed in green and marginally up. In Europe, the FTSE 100 was up 1.25%. CAC 40 and DAX was up 0.90% and 1.33% respectively while, the US Nasdaq was also up 0.45%.

European indices open on a positive note ahead of the ECB policy primarily as traders expected the central bank to extend the duration of its bond-buying programme. The ECB will commence its two-day policy meeting on Thursday, with the policy statement to be detailed on Friday. As expected, banks led the rally in European shares, as investors expected them to benefit from any extension of the ECB’s bond-buying plan.

MPC stated all the key rates remain unchanged. This includes Bank Rate which remains at 6.75%, Repo Rate remains 6.25%, Reverse Repo Rate remains 5.75%, CRR remains 4.00% and SLR remains 20.75%.

The announcement of the RBI Monetary Policy wherein the committee decided to keep the repo rate unchanged, has impacted price sensitive sectors including Auto and Realty.

RBI Withdraws the Incremental CRR on November 26, 2016 the Reserve Bank had announced an incremental cash reserve ratio (CRR) of 100 per cent of the increase in net demand and time liabilities (NDTL) of scheduled banks between September 16, 2016 and November 11, 2016, effective the fortnight beginning November 26, 2016. It was intended to absorb a part of the large increase in liquidity in the system following the withdrawal of the legal tender status of Rs 500 and Rs 1,000 denomination bank notes. It was also indicated that the incremental CRR was purely a temporary measure and that it would be reviewed on December 9, 2016 or even earlier.

With the enhancement in the ceiling for issue of securities under the Market Stabilisation Scheme (MSS) to Rs 6,000 billion, it has been decided to withdraw the incremental CRR effective the fortnight beginning December 10, 2016. The liquidity released by the discontinuation of the incremental CRR would be absorbed by a mix of MSS issuances and liquidity adjustment facility (LAF) operations.

Gold was trading at Rs 27,934 per 10 gms and silver was trading at Rs 41,163 per kg.

The Indian rupee was trading at 67.86 per US dollar.

Out of 1884 stocks traded on the NSE, 961 declined and 636 advanced today.

Top 5 Nifty Gainers: Tata Motors (3.64%), Tata Steel (3.18%), Adani Ports & Sez (2.71%), Maruti Suzuki (2.52%) and ITC Ltd (2.44%).

Top 5 Nifty Losers: Dr. Reddys Lab (-0.38%)

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At the end of trading hours, the only positive is that the indices have closed in green. Sensex opened on a high note and more or less was stagnant in terms of variations throughout the day. Similarly, Nifty too stayed flat throughout the day.

Nifty closed with a gain of 14 points and closed at 8,143.15, while BSE Sensex ended with a gain of 44 points at 26392.76.

On the global front, most Asian indices closed in green and marginally up. In Europe, the FTSE 100 was down 0.08%. CAC 40 and DAX was up 0.29% and 0.06% respectively while, the US Nasdaq was also up 1%.

All eyes are set on the RBI’s monetary policy meeting today. The results of the meeting will be out within a few hours.

Today’s monetary policy announcement is crucial as it is likely to offer some guidance on the demonetisation drive. Apart from that, the announcement will also offer some clarity regarding economic growth and inflation.

A rate cut, or the lack thereof, is not as crucial as the governor’s thoughts on the impact of demonetisation. We want to know whether he expects the near-term demand slowdown to have a snowball effect on the economy and specific businesses. But no one at the RBI has offered a concrete view so far.

Gold was trading at Rs 27,935 per 10 gms and silver was trading at Rs 41,240 per kg.

The Indian rupee was trading at 67.92 per US dollar.

Out of 1882 stocks traded on the NSE, 698 declined and 904 advanced today.

Top 5 Nifty Gainers: Adani Ports & Sez (1.87%), HDFC (1.87%), M&M (1.26%), Hero MotoCorp (1.20%) and Tata Motors (1.02%).

Top 5 Nifty Losers: Sun Pharma (-4.28%), TCS (-1.02%), Lupin Ltd. (-0.80%), Wipro (-0.48%) and Tata Steel (-0.44%)

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While the day began with both the Indices trading in red, there was some momentum gained towards the end. The Auto and Bank sectors activities ensured that the Sensex and Nifty ended in green. When the market closed, Sensex gained more than 100 points while Nifty gained 42 points and closed above 8100.

Nifty closed with a gain of 42 points and closed at 8,128.75, while BSE Sensex ended with a gain of 118 points at 26349.10.

On the global front, most Asian indices closed in red and marginally down. In Europe, the FTSE 100 was up 0.52%. CAC 40 and DAX was up 1.39% and 1.65% respectively, where all indices were trading in green while, the US Nasdaq was also up marginally.

The performance of India’s service sector weakened in November as a result of cash shortages. New business declined for the first time since June 2015, leading to a solid reduction in activity. Correspondingly, backlogs of work rose, while employment increased only marginally. In spite of the falls in output and new orders, optimism regarding future activity improved. Input costs were broadly unchanged, whereas prices charged decreased slightly.

Dropping from 54.5 to 46.7 in November, the seasonally adjusted headline Nikkei India Services Business Activity Index moved into contraction territory for the first time since June 2015 and pointed to the sharpest reduction in output for almost three years. Anecdotal evidence highlighted a lack of cash in the economy. Activity decreased in three of the six monitored sub-sectors, namely Financial Intermediation, Hotels & Restaurants and Renting & Business Activities.

Factory production rose further during the month, but the rate of growth eased. Concurrently, the seasonally adjusted Nikkei India Composite PMI Output Index dipped from October’s 45-month high of 55.4 to 49.1 in November, thereby pointing to a slight contraction in private sector activity overall.

As was the case for activity, new business inflows at services firms declined during November. The fall in new work was the first in 17 months and the steepest in over three years.

Gold was trading at Rs 27,925 per 10 gms and silver was trading at Rs 40,950 per kg.

The Indian rupee was trading at 68.26 per US dollar.

Out of 1436 stocks traded on the NSE, 594 declined and 788 advanced today.

Top 5 Nifty Gainers: GAIL (1.84%), HDFC (1.78%), NTPC (1.36%), Infosys Ltd. (1.35%) and Adani Ports & Sez (1.23%).

Top 5 Nifty Losers: Hind.Unillver (-0.86%), ITC Ltd (-0.82%), Axis Bank (-0.65%), Asian Paints (-0.62%) and BHEL (-0.27%)

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