RBI Monetary Policy Highlights, Airtel's Big Step Towards Broadband Expansion, and Buzzing Stocks Today

Thu, 9 Dec Pre-Open

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Indian share markets ended on a strong note yesterday.

The bulls continued to roar on the Dalal Street, as the key benchmark indices logged back-to-back strong gains helped by a status-quo RBI policy by the Reserve Bank of India.

At the closing bell yesterday, the BSE Sensex stood higher by 1,016 points (up 1.8%).

Meanwhile, the NSE Nifty closed higher by 293 points (up 1.7%).

Bajaj Finance and Maruti Suzuki were among the top gainers.

HDFC Life Insurance and Kotak Mahindra Bank, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended up by 1.4% and 1.5%, respectively.

On the sectoral front, gains were largely seen in the auto sector, telecom sector and IT sector.

Shares of GSK Pharma and Torrent Power hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading up by 0.3% at Rs 48,206 per 10 grams at the time of closing stock market hours yesterday.

Here are 4 Factors Why Indian Share Markets Rallied Yesterday

Omicron less severe: As per the report, the new Covid variant Omicron is unlikely to be more severe than the Delta variant, an overall positive sentiment persisted in the global markets.

Drug makers well prepared: British drugmaker GSK said its antibody-based Covid-19 therapy with US partner Vir Biotechnology is effective against all mutations of the new Omicron coronavirus variant.

Also, a South African study suggested that booster doses of the Covid-19 vaccine produced by Pfizer Inc and partner BioNTech could help to fend off infection from Omicron.

Macro data: The Indian equity benchmarks staged a strong up move for second straight session after the Reserve Bank of India (RBI), as widely expected, held interest rates steady at all-time low and maintained its accommodative stance for as long as necessary to support growth.

The RBI held its key lending rate at a record low today, saying growth was a priority as it warned of risks from inflation and the new Omicron variant on the economic recovery.

Sectoral performance: Gains were also seen as IT, auto and telecom sectors witnessed huge buying interest yesterday. The auto sector ended the day up by 2.2% today, while the IT sector and telecom sector ended their day higher by 2%.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Speaking of stock markets, Brijesh Bhatia talks about how you should think about trading OMC stocks, in his latest video for Fast Profits Daily.

In the video, Brijesh shows how OMC stocks move against crude oil prices and how to trade them. Tune in to find out more.

Top Stocks in Focus Today

Among the buzzing stocks today will be ABB India.

ABB India said it has partnered with Indore Smart City Development (ISCDL) to deploy next-generation digital technology that enables continuous supply of electricity to homes and businesses.

In the first phase of the collaboration, this technology enabled more than 2,300 connections to achieve 24/7 electricity supply with an efficient automatic response system (ARS) in case of power outages or disruption.

ABB and ISCDL now plan to replicate the same model in other areas of the city and position Indore as the model for smart city projects across India.

Indore, the largest city in Madhya Pradesh and home to over three million people and several key industries in the state, is also part of the central government's mission to develop 100 smart cities across the country.

One of the key parameters of a smart city is 24/7 supply of electricity to enable digital transformation and the supply of key services to citizens.

Indore has set its target to boost the smart city development in sync with its 'swachh' identity in the world.

ABB's Compact Secondary Substations (CSS) used in the project reduces downtime by providing steady and reliable power supply through digitally enabled SCADA (supervisory control and data acquisition) solutions.

Banking sector stocks will also be in focus today.

The RBI's six-member monetary policy committee (MPC), headed by Governor Shaktikanta Das, decided to maintain key interest rates for a ninth straight meeting, retaining an accommodative stance amid the threat surrounding Omicron coronavirus variant.

Repo and reverse repo rates currently stand at 4% and 3.4%, respectively.

The RBI will continue to manage liquidity that is conducive to entrenching the recovery, fostering macro-economic and financial stability, Das reaffirmed.

The Reserve Bank has stuck to its liquidity playbook by saying that it will continue to use variable rate reverse repo operations to absorb funds.

14-VRRRs will remain the preferred duration to absorb liquidity although the amount for auction has been raised. The RBI will conduct a variable reverse repo (VRRR) auction of Rs 6.5 tn on 17 December and Rs 7.5 tn on 31 December.

Growth Outlook

The Indian economy grew 20.1% in the first quarter of the current financial year and 8.4% in the second. With the economy reopening and high-contact services resuming, the output is expected to remain strong in the third quarter.

Supply disruptions, higher commodity prices and now concerns caused by the new Covid-19 variant Omicron has, however, added uncertainty to the outlook.

Taking all these factors into consideration, projection for real gross domestic product (GDP) growth is retained at 9.5% in the fiscal 2022.

Reliance Industries' Joint Venture with Abu Dhabi-Based TA'ZIZ

Shares of Reliance Industries rose 2% after the company announced a partnership with Abu Dhabi Chemicals Derivatives Company RSC (TA'ZIZ) for chemical projects worth US$ 2 bn in Ruwais.

In a statement, Reliance Industries said,

• The new joint-venture will construct and operate a chlor-alkali, ethylene dichloride (EDC) and polyvinyl chloride (PVC) production facility, with an investment of more than US$2 bn.

Representing the first production of these chemicals in the UAE, the project will enable the substitution of imports and the creation of new local value chains, while also meeting growing demand for these chemicals globally.

The TA'ZIZ Industrial Chemicals Zone is a joint venture between Abu Dhabi National Oil Company (ADNOC) and ADQ.

The project builds on ADNOC and Reliance's long-standing strategic partnership and is Reliance's first investment in the MENA region.

Airtel & Juniper Networks Sign Deal for Extension Broadband Coverage

Bharti Airtel selects California-based Juniper Networks for network upgrades for the expansion of Airtel's nationwide broadband coverage across India.

Juniper Networks will supply, install and provide support for upgrades to the MX Series routers and line cards as part of its market-leading broadband network gateway (BNG) to manage their subscribers and services, as well as carrier-grade NAT (CGNAT) solutions to ensure secure encryption across the network respectively, the company said in a statement.

Airtel so far has expanded its Fibre-to-the-Home (FTTH) broadband coverage to over 430 towns.

It further plans to cover three crore households in over 2,000 cities in the country over the next three years.

Sajan Paul, Managing Director & Country Manager, India & SAARC, Juniper Networks, said,

• We are privileged to have been Airtel's partner for the last 15 years, growing alongside them as they have expanded their broadband and ISP network, in service of India's home, SMB and large enterprise customers. At Juniper, we strive to deliver network experiences that transform how people connect, work and live.
  
  As Airtel gears up their network for 5G, we are excited to continually contribute towards their network transformation, not just in support of their fiber-to-the-home broadband services expansion, but also for other use cases and applications across various business segments.

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

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

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