RBI's Monetary Policy Decision, Key Q3FY20 Results and Top Cues in Focus Today

Thu, 6 Feb Pre-Open

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On Wednesday, Indian share markets traded on a positive note throughout the day and ended higher.

The BSE Sensex closed higher by 353 points to end the day at 41,143. Tata Steel and Bharti Airtel were among the top gainers.

While the broader NSE Nifty ended up by 111 points to end at 12,090.

Among BSE sectoral indices, metal stocks gained the most, followed by realty stocks and telecom stocks.

Speaking of the current stock market scenario, while everyone out there is buzzing about the Union Budget and what it has in store for the stock markets, our analysts at Equitymaster are singing a different tune.

They are encouraging readers to look beyond the short-term blip that the Budget will bring and focus on the long-term trend that will rule the market.

Vijay Bhambwani, editor of Fast Profits Daily, has recorded his views on the market post the union budget in his latest video. You can access the same here: My Outlook for Traders After the Budget

Meanwhile, here's what Rahul Shah wrote about it in a recent edition of The 5 Minute WrapUp...

• All said and done, the fact of the matter is that the economy is indeed struggling.
  
  And it will be some time before a full-fledged recovery is achieved.
  
  However, is the situation so bad that it deserved a close to 1,000 point correction on the Sensex?
  
  Well, I don't think so.
  
  It is not as if the economic growth will fall dramatically from here. Yes, certain big bang measures in the budget would have led to a faster recovery perhaps. But ours is a long term story with certain hiccups along the way like we are witnessing right now.
  
  And that means pouncing on any adverse reaction from the market like the present one.

As per him, a meaningful fall in the market is an opportunity to buy the long term India story at a marked down price. And it should be seen as a boon and not a bane.

Already, the broader market valuation is looking a lot more attractive than it did a few weeks back.

Some more knee jerk reaction by the stock market and it could turn out to be one the biggest buying opportunities in years.

Top Stocks in Action Today

Force Motors share price will be in focus today as the company has reported the production, sales and export of the products manufactured during the month of January 2020.

The company's production of Small Commercial Vehicles (SCV) & Light Commercial Vehicles (LCV) stood at 1,789 units and Utility Vehicles (UV), Sports Utility Vehicles (SUV) & tractors stood at 831 units.

REC share price will also be in focus today as the company has received approval for the scheme of amalgamation of both wholly owned subsidiaries of the company namely, REC Transmission Projects Company and REC Power Distribution company.

Market participants will also track Aarti Drugs share price, Bata India share price, and Eicher Motors share price as these companies will announce their December quarter (Q3FY20) results later today.

You can also read our recently released Q3FY20 results of ITC, Power Grid, Amara Raja Batteries, Vedanta, SBI, HUL, Dabur, Hawkins Cookers, Grindwell Norton.

Results Corner

Mahindra Logistics has reported a fall of 17.7% in its net profit at Rs 157.7 million for the December quarter as compared to Rs 191.5 million for the same quarter in the previous year.

TVS Motors has reported a fall of 32.1% in its net profit at Rs 1,210.7 million for the quarter under review as compared to Rs 1,783.9 million for the same quarter in the previous year.

Total income of the company decreased by 11.5% at Rs 41,263.5 million for Q3FY20 as compared Rs 46,646.3 million for the corresponding quarter previous year.

To know more about the company, you can read TVS Motors' latest result analysis on our website.

Adani Ports & SEZ has reported a fall of 49.9% in its net profit at Rs 4,589.3 million for Q3FY20 as compared to Rs 9,163.2 million for the same quarter in the previous year.

Punjab National Bank (PNB) has reported a net loss of Rs 4.9 billion for the quarter under review as compared to net profit of Rs 2.5 billion for the same quarter in the previous year.

However, total income of the bank increased by 7.5% at Rs 159.7 billion for Q3FY20 as compared Rs 148.5 billion for the corresponding quarter previous year.

Zydus Wellness has reported a consolidated net profit of Rs 42.4 million for the quarter ended December 31, 2019 against a net profit of Rs 396.9 million for the corresponding period of the previous fiscal.

Consolidated revenue from operations of the company stood at Rs 3.3 billion for the quarter under consideration. It was Rs 1.4 billion for the same period a year ago.

RBI's Monetary Policy Decision

As per a leading financial daily, Reserve Bank of India (RBI) Governor Shaktikanta Das-led Monetary Policy Committee (MPC) is expected to maintain status quo on policy rates in its last monetary policy for the current financial year, despite the economic slowdown.

The MPC, which began its three-day meeting on February 4, will announce its decision on the key lending rates today.

Amid spike in inflation, most economists are expecting the central bank to hold rates, adding that the panel might wait for an ease in food prices to see how inflation pans out in coming months.

According to a Reuters poll of economists, the RBI is expected to keep the repo rate unchanged until October.

In a surprise move, the RBI had maintained a status quo in December, leaving the key repo rate at 5.15% amid rising concerns over inflation. This halt came after five consecutive cuts of 135 basis points in 2019.

From the Commodity Space...

Crude oil prices rose on Wednesday, boosted by news that OPEC and its producer allies are weighing further output cuts to counter a potential squeeze on global oil demand resulting from China's fast-spreading coronavirus.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, a group known as OPEC+, weighed the impact on global oil demand, and economic growth, of the coronavirus outbreak at a meeting on Tuesday, hearing from China's envoy to the United Nations in Vienna.

In other news, US crude oil stocks rose by 4.2 million barrels in the week to January 31 to 432.9 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.

Analysts had expected for a build of 2.8 million barrels.

We will keep you updated on the latest developments from this space. Stay tuned.

As per the economic schedule released by Vijay Bhambwani, editor of Weekly Cash Alerts, here are the important events due later today:

• India - RBI MPC Interest Rate Decision
• US - Natural Gas Storage Data
• Germany - Factory Orders December

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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