RBI Governor’s Speech Boosts Market Over 21,000
Have you noticed the recent buzz in the Indian financial markets?
Much of it is thanks to RBI Governor Shaktikanta Das’s speech, which coincided with the Nifty hitting a remarkable 21,000 mark. In his December 8, 2023 speech, Governor Das shared some key insights that have uplifted market sentiments.
So, what did he say that’s got everyone talking?
The RBI has decided to keep the repo rate steady at 6.5%. This decision, unanimously made by the Monetary Policy Committee, is a big deal. It reassures the market and shows the RBI’s focus on nurturing economic growth while closely monitoring inflation.
Governor Das also painted a positive picture of India’s economic growth. He talked about the GDP growth hitting 7.7 in the first half of the fiscal year.
And guess what?
The forecast for FY24’s growth has been bumped from 6.5% to an impressive 7%. That’s definitely something that has got investors excited.
But there’s more. The RBI Governor highlighted several encouraging trends, like the steady urban demand, improvements in rural areas, solid public sector spending, and a rise in private sector investments. All these factors are contributing to a strong growth trajectory for India.
The banking and corporate sectors are looking up as well. The RBI is optimistic about the health of bank and corporate balance sheets, high capacity utilisation, and ongoing business confidence.
This, combined with the government’s push for infrastructure, is expected to drive private sector investments.
On the international front, the RBI expects the external sector’s drag on the economy to lessen.
There’s been a noticeable recovery in both goods and services exports. The services sector and remittances will likely help offset current account deficit issues.
Now, about inflation – always a hot topic, right?
Governor Das was cautiously optimistic. The inflation forecast for FY24 is pegged at 5.4%, which will bring it down to 4% by the second quarter of FY25.
While there are some uncertainties, the global economic scenario and China’s economic slowdown might help ease global commodity prices, which could, in turn, help with inflation.
To sum up, the mix of solid growth prospects and manageable inflation keeps the market mood upbeat. Sure, the Indian market valuations are a bit above the long-term average.
Still, with such a supportive economic background, the market is expected to maintain its bullish stance.
📈 Weekly Update
– Mr Abhishek Jain, Head of Research, Arihant Capital
The benchmark indices rose for six weeks, logging the best weekly gains in nearly three years. The Nifty hit the 21,000 mark for the first time during intra-day trading. The Nifty Bank also touched a lifetime high during the last leg of the trade and ended 0.90% higher at 47,262.
Nifty ended up by 0.33% at 20,969 level. Sensex was down 0.44% at 69,826, and Nifty Bank was up by 0.90% at 47,262.
Nifty
Let’s look at Nifty’s daily chart. We are observing a “Run away gap” formation and, on the weekly chart, a Strong bull candlestick formation, but we are also keeping prices trading far away from short-term moving averages; if we analyse both chart patterns, it indicates momentum will remain upside and any dip use as a buying opportunity.
If Nifty starts trading above the 21050 level, then it can touch the 21150-21300 level, while on the downside, support is 20,800; if it starts to change below, it can test the level 20,600 and 20,300 levels.
Banknifty
Let’s look at the daily chart of Bank-Nifty. We are observing a “Rounding bottom” formation and, on the weekly chart “, a “Strong bull candlestick formation.” If we analyse both chart patterns, it indicates that Bank-Nifty can outperform Nifty.
Bank-nifty starts trading above 47,350, then can touch 47,600 and 47,900 levels. However, downside support comes at 47,050; below that, we can see 46,800 and 46,600 levels.
📰 Stocks In News
💸 L&T (Larsen & Toubro): Signed a financing agreement with the Asian Development Bank for $125 million.
💊 Gland Pharma: USFDA has completed the inspection of its Pashamylaram facility in Hyderabad.
🏗️ JSW Steel: Completed its ₹750 crore investment in JSW Paints.
📑 Siemens: Received a tax demand of around ₹24 crore.
🚗 Maruti Suzuki: The Board has approved the allotment of over 1.23 crore shares to Suzuki Motor Corporation.
🌱 GAIL (Gas Authority of India Limited): The Punjab Energy Development Agency has signed an agreement with GAIL to set up 10 compressed biogas projects and other new and renewable energy projects in the state.
🚛 Tata Motors: Appointed Inchcape Plc as its distributor for commercial vehicles in Thailand.
🔧 CG Power: Has filed an application with the government to set up an Outsourced Semiconductor Assembly and Test facility (OSAT).
🔌 Power Finance: Subsidiary PFC Consulting has started a new Special Purpose Vehicle (SPV) for developing an intra-state transmission system.
💼 Jio Financial: Submitted an application to RBI to convert the company into a Core Investment Company (CIC) from a Non-Banking Financial Company (NBFC).
⛽ BPCL (Bharat Petroleum Corporation Limited): The board of directors will meet on 29 Nov to discuss whether they should declare a dividend.
📣 Jio Financial: Clarified that it is not planning to raise money.
🛍️ Adani Enterprises: Mumbai Travel Retail Pvt., a subsidiary of Adani Enterprises, has incorporated a wholly-owned subsidiary, MTRPL Macau.
🚚 Hindustan Zinc: Partnered with Inland EV Green Services to get 10 electric vehicle trucks.
🚆 Titagarh Rail Systems: Partnered with ABB India.
💊 Cipla: Received a warning letter from the USFDA after an inspection at the company’s Pithampur facility.
🏡 Macrotech Developers: Planning to invest about ₹800 crore to construct 2 housing projects in Bengaluru.
💼 L&T (Larsen & Toubro): The company’s hydrocarbon business has gotten an order valued between ₹10,000-15,000 crore from a client in the Middle East.
🚄 IRCTC (Indian Railway Catering and Tourism Corporation): The Ministry of Railways has allowed IRCTC to go for long-term tenders for 7 years.
💉 Aurobindo Pharma: USFDA completed an inspection at APL Healthcare’s manufacturing plant with zero observations. APL Healthcare is a wholly-owned subsidiary of Aurobindo Pharma.
📰 Quick Bites
📱 5G in India: Reached 738 districts and around 10 crore users.
🚗 Subsidies for EVs: The Indian government provided ₹5,228 crore to EV manufacturers to sell 11.53 lakh electric vehicles until December 1, 2023, under the FAME India Phase II Scheme.
⛏️ India’s Coal Imports: Dropped by 5% to 125.21 million tonnes during April-September, according to Coal and Power Minister Prahlad Joshi.
🔧 Qualcomm and NavIC: Qualcomm announced support for India’s satellite navigation system (NavIC) in upcoming chipsets.
🚀 Startup Landscape in India: Around 1.15 lakh entities were identified as startups as of October 31, 2023, by the Department for Promotion of Industry and Internal Trade (DPIIT).
💤 The Sleep Company Funding: Raised ₹184 crore in funding from Premji Invest and Fireside Ventures.
💰 Life Insurance Premium Collection: Fell 25% year-on-year in November 2023 to ₹26,494.83 crore, as per Life Insurance Council data.
🌾 Rice Exports from India: The government permitted limited exports of non-basmati white rice to Kenya, Egypt, Madagascar, Equatorial Guinea, and Comoros.
🌱 Sustainability Corner
🚗 Nitin Gadkari on EVs and ICE Vehicles: Transport Minister Nitin Gadkari predicts that the cost of electric vehicles (EVs) and internal combustion engine (ICE) vehicles in India will equalize in the next 18 months.
🏭 Bosch’s Generative AI Pilot: Bosch to test generative AI in manufacturing at two plants in Germany, expecting to reduce AI solution rollout and setup time from months to weeks.
🔋 Stellantis and Ample’s Battery Tech: Stellantis will use Ample’s 5-minute battery swapping technology in Europe starting in 2024, with modular batteries fitting any EV without needing platform reengineering.
⚡ BPCL & Tata Motors EV Charging Venture: Partnership to establish 7,000 EV charging stations across India, leveraging BPCL’s fuel station network and Tata Motors’ EV insights.
🔬 Altair-JLR-Danecca EV Design Research: Awarded UK government funding through the Faraday Battery Challenge to develop a new EV design process using Altair simulation technology.
🏦 Tata Motors & HDFC Bank Digital Financing: Collaboration for digital financing solutions covering Tata’s entire range of commercial vehicles.
🛵 Hero MotoCorp & Ather Energy Charging Network: Joint effort to create an interoperable 2-wheeler fast-charging network in India, covering 100 cities with over 1,900 charging points.
🚘 Mahindra XUV400 EV Upgrades: The updated model set for 2024 release to include a larger infotainment screen with wireless Apple CarPlay and Android Auto, priced around ₹19.5 lakh.
🔋 EU Auto Makers on EV Battery Rules: Welcome the proposal to extend current battery rules of origin by three years, potentially avoiding 10% tariffs on exports to the UK.
🛴 Creatara’s Electric Scooters: Delhi-based EV startup reveals two electric scooter prototypes with a top speed of 100kph, 4kW motor, and 100km range, eyeing a market launch in 6-9 months.
💰 FAME 2 Subsidies for EVs in India: Over 11.5 lakh EVs have benefited from subsidies worth ₹5,228 crore under the FAME 2 scheme.
Also Read: How Will the RBI’s Monetary Policy Affect Market Mood?
