Market Highlights: Sensex snaps 3-day gaining streak, ends 260 pts down as RBI says GDP growth to contract in FY21

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Updated: May 22, 2020 6:03:56 pm

Share Market News Today | Sensex, Nifty, Share Prices Highlights: Out of 30 stocks that constitute BSE Sensex, 18 scrips finished their trade in red. Axis Bank was the top Sensex loser, down 5.65 per cent, followed by HDFC and Bajaj Finance

Share Market Today, Share Market LiveNifty Financial Services dropped 272 points dragged by M&M Financial Services, Shriram Transport Finance and PFC

Share Market News Today | Sensex, Nifty, Share Prices Highlights: Domestic equity market benchmarks BSE Sensex and Nifty snapped the three-day gaining streak to settle nearly one per cent lower on Friday after RBI Governor announced to slash repo rate by 40 bps to 4 per cent. RBI MPC also said that it expects the GDP growth for this fiscal to remain in negative territory. The 30-share Sensex fell 260 points or 0.84 per cent to end at 30,672, while the broader Nifty 50 index dropped 67 points or 0.74 per cent to close the session at 9,039. Out of 30 stocks that constitute BSE Sensex, 18 scrips finished their trade in red. Axis Bank was the top Sensex loser, down 5.65 per cent, followed by HDFC, Bajaj Finance, ICICI Bank and Bajaj-Auto. On the other hand, M&M gained 4.30 per cent and was the top Sensex gainer. Infosys, Asian paints, UltraTech Cement, Tech Mahindra and Maruti Suzuki were among other gainers on the index. Most of the sectoral indices ended lower with up to 3.06 per cent decline. Nifty Financial Services dropped 272 points dragged by M&M Financial Services, Shriram Transport Finance and PFC.

Reliance Industries announced that private equity firm KKR will invest Rs 11,367 crore in Jio Platforms for a 2.32 per cent stake. Following the investments from Facebook, Silver Lake, Vista Equity and General Atlantic, this will be the fifth investment in Reliance Industries. This transaction values Jio Platforms at an equity value of ₹ 4.91 lakh crore and an enterprise value of ₹ 5.16 lakh crore

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Highlights

    15:49 (IST)22 May 2020
    Sensex, Nifty end nearly 1% lower

    The 30-share Sensex fell 260 points or 0.84 per cent to end at 30,672, while the broader Nifty 50 index dropped 67 points or 0.74 per cent to close the session at 9,039

    15:49 (IST)22 May 2020
    Further rate cut is expected as the market is unstable

    To control the inflation and inject more liquidity in the market, a further rate cut is expected as the market is unstable and there is a minimal sign of growth. The growing economic and financial stress will see a massive reduction and the measures overall will help bring in financial stability: Ashok Mohanani, Chairman, EKTA World & President-Elect NAREDCO, Maharashtra

    15:30 (IST)22 May 2020
    Current scenario offers excellent investment opportunities in residential real estate

    We hope that the government will continue to take all the necessary actions in the near future for the betterment of the overall economy. The current scenario offers excellent investment opportunities in residential real estate as affordability is at all-time high. The post-pandemic world will be good for the real estate sector, the one sector that will emerge as the silver lining in such a bleak scenario and offers you the best bet - stability, security and safety: Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani 

    15:29 (IST)22 May 2020
    Borrowers will stand to gain as EMIs on home loan expected to fall

    The moratorium on housing EMI’s and deferment of interest payments by another three months will give a lot of relief to consumers as they can now rearrange their finances. Another repo cut by 40 basis points to 4% is also a welcome move and with the cost of funds coming down for banks now, borrowers will stand to gain as the EMIs on their home loan are expected to fall. This is another big announcement which will ease liquidity for developers. However, quick transmission will be key to the huge liquidity infused by RBI. All these measures augur well for the real estate sector during such trying times: Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani 

    15:11 (IST)22 May 2020
    Near term bias turned bearish for rupee after today’s announcements by RBI

    The Reserve Bank of India unexpectedly cuts interest rates pressured rupee. Safe haven demand for dollar picked up amid escalation of U.S.-China trade tensions following China’s announcement that it is in the midst of enacting a new security law in Hong Kong. Market read the announcement as negative and dragged rupee lower as RBI said the economy to contract in current fiscal and doubt about faster recovery in demand. The coming week will be holiday truncated week as forex market will remain closed on Monday due to Id-Ul-Fitr. The near term bias turned bearish for rupee after today’s announcement and we may trade below 76.20 next week: Devarsh Vakil, Head Advisory, HDFC Securities

    15:06 (IST)22 May 2020
    Need of the hour is for the RBI to undertake more unconventional policy measures

    Given the surplus liquidity in the system of over ~7 lakh cr. which is parked with the RBI through the reverse repo window we believe that the need of the hour is for the RBI to undertake more unconventional policy measures like operation twist which can help push down the long term G-Sec rates and help bring down borrowing costs for consumers and businesses: Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd

    14:58 (IST)22 May 2020
    RIL-Rights Entitlement share price plunges over 8% after 54% gain in last two days

    Reliance Industries-Rights Entitlement (RIL-RE) share price plunged as much as 8.17 per cent to Rs 214.70 apiece on the National Stock Exchange (NSE). In the last two sessions, RIL-RE price soared nearly 54 per cent from an opening price of Rs 152 on May 20 to Rs 233.60 at Thursday’s close. This is for the first time that Rights Entitlements (RE) were allowed to trade in India after market regulator Sebi introduced this platform earlier this year. With rights entitlements getting listed on the exchanges, it has become easier for the investors to sell their entitlement over the rights issue. Using this platform, buyers who are interested to buy rights can easily apply for the issue.

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    14:44 (IST)22 May 2020
    How RBI repo rate cut, loan moratorium will help economy; what Shaktikanta Das could have done more

    RBI Governor Shaktikanta Das today announced a slew of monetary measures including an out-of-turn repo rate cut and allowing deferment of loan repayments, in order to support the economy amid weak activity. Shaktikanta Das addressed a press conference for the first time after Finance Minister Nirmala Sitharaman detailed out the economic relief measures of Rs 21 lakh crore.

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    14:14 (IST)22 May 2020
    Amazon India to hire 50,000 for temp jobs in fulfilment, delivery as coronavirus pushes ecommerce

    Bucking the trend of unemployment and layoffs, Amazon India has decided to hire about 50,000 people in temporary jobs as coronavirus lockdown has pushed India’s e-commerce sector. The e-tailer “opened close to 50,000 seasonal roles to meet the surge in demand from people relying on Amazon’s service, particularly those most vulnerable to being out in public,” it said on Friday. There will be various roles across fulfilment centres and delivery networks including part-time flexible work opportunities as independent contractors with Amazon Flex.

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    13:56 (IST)22 May 2020
    We might see some banks taking a selective approach in extending the moratorium

    We believe the data of improvement in monetary policy transmission is indeed a favorable sign and that may result in further credit off-take, with further easing in the lockdown situation. However, on the flip side, the extension of the moratorium would hurt the banking and NBFC sector, due to higher provisioning and risk of further deterioration in the asset quality. And, we might see some banks taking a selective approach in extending the moratorium. Also, markets were hoping for updates on the government borrowing program for FY21: Gurpreet Sidana, Chief Operating Officer, Religare Broking Ltd

    13:49 (IST)22 May 2020
    RBI’s moratorium extension sends financials tumbling, Bajaj Finance and SBI hit new 52-week lows

    The Reserve bank of India’s (RBI) decision to extend the loan-moratorium period for another three months, although seen as a positive for borrowers, is not so enticing when it comes to lenders. Reacting to the RBI’s announcements, Bank Nifty tanked 2.7% while the Nifty Financial services index dropped 3.22%. The extension of moratorium also sent stocks such as State Bank of India, Bajaj Finance, and Mahindra & Mahindra Finance down, as each of them hit their respective 52-week low trading values. All the financial stocks on the S&P BSE Sensex or the NSE Nifty 50 were trading in the red.

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    13:38 (IST)22 May 2020
    RBI's rate cut move couldn't cheer the forex traders

    This week, the trend in USD/INR spot was very lacklustre and in a very tight range. As more economies reopening up and there is progress over Covid-19 vaccine, there is some optimism amongst the traders but year-long US-China trade tiff has been keeping a check on appreciation in the rupee. Also, RBI's rate cut move couldn't cheer the forex traders. The 40bps repo rate cut move was in line with market expectations but it didn't provide full-fledged restructuring of loans also didn't give the FY21 GDP figure: Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services

    13:29 (IST)22 May 2020
    Brokerage view on RIL

    We maintain our constructive view on RIL, with a TP of Rs1,630. The 1.5 years spread of the rights issue (25%-25%-50% for May’20-May’21-Nov’21) has led to the entitlement price trade at 26% premium to current intrinsic value. Following Facebook, the latest round of fundraising at Jio Platforms (JPL), involving reputed international financial investors like Silver Lake, Vista Equity and General Atlantic, further affirms credibility and outlook. Besides, news flow suggests further interest. We remain positive on Jio’s tariff outlook and expect ARPU improvement from H1FY21 while pencilling another industry tariff hike in FY21 Emkay Global Financial Services

    13:22 (IST)22 May 2020
    Reliance may halt after stake sale of up to a max of 24.99% in Jio Platforms over the next few weeks

    The fifth stake sale in Jio Platforms by Reliance Industries will mean a total stake dilution of 17.12% for Rs78,562 cr. This will help Reliance to reach debt-free status soon. A range of diverse marquee investors lining up to take small stakes speaks volumes about the business model and promoters’ capabilities. Ideally, Reliance may halt after stake sale of up to a max of 24.99% in Jio Platforms over the next few weeks: Deepak Jasani, Head Retail Research, HDFC Securities 

    12:57 (IST)22 May 2020
    Dhiraj Relli, MD & CEO, HDFC Securities on RBI's announcements

    The RBI has once again announced a repo rate cut post an unscheduled MPC meet. The RBI statement covers reliefs across a whole host of areas. The cautious language in the statement of the Governor raises concerns about the state of the economy and its path going ahead.The markets have initially reacted negatively to the RBI announcement. Shareholders of Banks are worried by the current economic conditions and the pain that is postponed due to the moratorium being extended. The Govt and the RBI may be using up all their ammunition a little prematurely to fight the current situation. One wonders whether all these relief measures would have been more impactful after the lockdown was completely lifted  ~Dhiraj Relli, MD & CEO, HDFC Securities

    12:44 (IST)22 May 2020
    Gold prices rise today due to RBI rate cut, US-China trade tension, spike in coronavirus cases

    Gold prices surged nearly 1 per cent in Friday’s session on the back of fresh tensions between US-China which made investors rush to safe-haven assets. Besides, a sharp rise in coronavirus (COVID-19) cases in the country also spooked gold demand. On MCX, gold June futures were trading Rs 400 or 0.86 per cent higher at Rs 46,788 per 10 grams, while silver July futures were up just Rs 80 or 0.17 per cent at Rs 47,415 per Kg.

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    12:29 (IST)22 May 2020
    Expect more policy response from RBI in the future

    We expect more policy response from RBI in the future in terms of further rate cuts, OMOs to bring down yield curve, possibly even monetization of government borrowings in time to come: Amar Ambani, Senior President and Head of Research – Institutional Equities, YES Securities

    12:18 (IST)22 May 2020
    MPC forward guidance is more directional in nature

    High-frequency indicators point towards collapse in demand during the lockdown. Industrial production down to 17% and capital goods contracted 35% in March. 40% rise in Khariff sowing raises hopes and FX reserves at $487bn is robust and equals one-year imports. Given a rather uncertain inflation outlook, MPC forward guidance is more directional in nature: S Ranganathan, Head of Research at LKP Securities

    12:16 (IST)22 May 2020
    Impact on the banking sector will be negative

    The rate cut announced today will have limited impact in the short term, but it is helpful to revive growth over the longer term. However, the decision to extend the moratorium period by another 3 months is a significant negative for the private banks both in the medium and long term. The impact on the banking sector will be negative: Naveen Kulkarni, Chief Investment Officer, Axis Securities

    12:12 (IST)22 May 2020
    Extension of moratorium is good for the economy but in substance will negatively impact banks and NBFCs

    RBI with its monetary policy again gave a surprise rate cut of 0.4% and announced various liquidity measures. The disappointment came as there was no mention of the restructuring of loans or other supportive measures qua banks. The negative outlook on growth without a definitive number added to the woes. Extension of moratorium is good for the economy but in substance will negatively impact banks and NBFCs. As a whole, RBI has taken a calibrated approach to save the economy rather than favouring banks: Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote

    12:11 (IST)22 May 2020
    Serious and effective steps are required to boost the demand side of the economy

    The economic revival will start with the opening up of the lockdown and a return of the working population to work asap and dealing with the new normal of living with the virus by taking adequate measures. The measures that the RBI is taking to try and boost the economy is positive, however they must insist on transmission of liquidity and the rate cuts to the borrowers from the banks and financial institutions, which is currently not happening as fast as it can be in the context of the pandemic. Furthermore serious and effective steps are required to boost the demand side of the economy and spur consumption which we hope will happen soon: Rohit Poddar, Managing Director, Poddar Housing and Development Ltd. and Joint Secretary, NAREDCO Maharashtra

    12:09 (IST)22 May 2020
    India would need more measures on a continuous basis on both fiscal and monetary front

    RBI continues to support on the Monetary front by doing out of turn MPC meets to cut rates. Lowering the cost of capital is some relief in these times. Moratorium extension was expected, considering the economic activity levels. India would need more measures on a continuous basis on both fiscal and monetary front to revive the economy from the current phase of negative growth! Rajat Rajgarhia, MD & CEO, Institutional Equities, Motilal Oswal Financial Services

    12:00 (IST)22 May 2020
    Bandhan Bank share price tanks over 7% as Amphan cyclone rips through business

    Bandhan Bank share price tanked 7.2 per cent to Rs 195.40 apiece on BSE in Friday’s weak trade after the bank in a stock exchange filing informed that the business of around 65,000 of micro banking borrowers, amounting to exposure of approximately Rs 260 crore, could be impacted due to the Amphan cyclone. “As per the initial assessment, 49 banking units (micro banking outlets) in five districts were impacted, of which 45 have resumed operations today,” Bandhan Bank said in a BSE filing.

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    11:32 (IST)22 May 2020
    Reserve Bank of India surprises with 40 bps repo rate cut; Shaktikanta Das 'worried' over inflation

    The Reserve Bank of India’s Monetary Policy Committee (MPC), in an unscheduled meeting, today cut the policy repo rate by 40 basis points in a surprise move, after an unscheduled meeting of the Monetary Policy Committee, to contain the economic fallout of the coronavirus-lockdown. With this, the repo rate is down to 4% from the earlier 4.4%. Governor Shaktikanta Das said in a press briefing that the MPC unanimously voted to cut the repo rate keeping in mind the nation-wide lockdown. The MPC voted 5-1 in favour of a 40 basis point rate cut, while also bringing down the reverse repo rate to 3.35%. Shaktikanta Das, however, said the inflation outlook is highly uncertain due to the outbreak of the COVID-19 pandemic, and expressed concern over elevated prices of pulses.

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    11:30 (IST)22 May 2020
    We are happy that RBI reduced key policy rate and took note of rate cut transmission to borrowers

    We are delighted with the reduction in prime lending rates announced today by the RBI. With a cumulative 115 basis point rate cut by RBI as response to the impact of COVID -19, we are in line with the rate cuts announced by developed economies like USA (150 bps) and UK (65 bps). Given the backdrop of an unprecedented economic situation, we are happy that the RBI has reduced the key policy rate and taken note of rate cut transmission to borrowers. The extension on the moratorium and improved terms will provide a breather to industry and household borrowers alike: Shishir Baijal, Chairman & Managing Director, Knight Frank India

    11:12 (IST)22 May 2020
    Banks may get hit in short term

    Broadly it may be better for companies but banks may get hit in the short term. Overall the bonds rallied with the yield on old 10y benchmark falling 15bps in a knee jerk reaction. Rupee moves are fairly muted since we have huge selling interest by nationalized banks, likely on behalf of RBI at 75.85 levels. Of course the equities and banks initial reaction is negative: Abhishek Goenka, Founder & CEO, IFA Global

    11:04 (IST)22 May 2020
    Rate cut and reverse repo rate cuts are moves in the right direction

    It was indeed a good policy by RBI. Extension of the moratorium and converting the interest into term loans which essentially increases the payback cycle, swap facility for Exim banks, extension of import payments and increasing the exporters' length of credit to 15 months from one year are steps in the right direction and eases the liquidity situation with export and import companies. Rate cut and reverse repo rate cuts are moves in the right direction but risk aversion by banks is still there. Some restructuring of the news of the loan would have been a step in the right direction which the market was awaiting: Abhishek Goenka, Founder & CEO, IFA Global

    11:02 (IST)22 May 2020
    Repo rate cut more or less in line with expectations by majority of market participants

    The further cut in the repo rate by the RBI is more or less in line with expectations by majority of the market participants. The cut has been effected considering the fact that there is growing economic and financial stress on account of the pandemic involving all major sectors of economic activity. This would help in bringing down the market rates as also lending rates mostly at the short end of the curve: Joseph Thomas, Head of Research - Emkay Wealth Management

    11:01 (IST)22 May 2020
    Banks should immediately pass on reduction in repo to ensure the objectives of demand creation

    Repo rate at 4% is going to drastically reduce the borrowing cost and contribute to demand generation. The banks should immediately pass on the reduction in the repo to ensure the objectives of demand creation and liquidity infusion are achieved. The extension of the moratorium on loans by another 3 months will help institutions and individuals alike in battling the ongoing crisis: Kaushal Agarwal - Chairman, The Guardians Real Estate Advisory

    10:59 (IST)22 May 2020
    RBI aims to inject more liquidity into the system

    By cutting the repo rate and reverse repo rate, RBI aims to inject more liquidity into the system. However, more importantly, what is needed is to remove the risk averseness as there is substantial liquidity in the banking sector. The rising food inflation rate could be a challenge to the RBI as it is following the inflation targeting regime. Similarly, the extension of the moratorium would bring in some relief to the borrowers, but it can put pressure on the bank's balance sheet: Deepthi Mathew- Economist- Geojit Financial Services

    10:58 (IST)22 May 2020
    RBI remains circumspect on growth and inflation outlook

    Rate cut of 40 bps is in line with expectations as also the extension of loan moratorium. The measure to convert the moratorium interest payment into a term loan payable in course of FY21 is the most important announcement. This can reduce NPA, at least in the next 12 month. The additional liquidity measures remain rather muted. The RBI also remains circumspect on growth and inflation outlook: Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers

    10:47 (IST)22 May 2020
    Stress in the banking sector will continue

    RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meeting to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models. Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue: VK Vijayakumar- Chief Investment Strategist- Geojit Financial Services

    10:42 (IST)22 May 2020
    Nifty Bank index extends losses, down nearly 3%

    Nifty Bank index extended losses and was down nearly 3 per cent as RBI governor announced an extension of the moratorium and deferment of working capital during 6 months will be converted into term loan which can be repaid by March 31

    10:39 (IST)22 May 2020
    Rate sensitive indices tank; Nifty Bank, Nifty Auto, Nifty Financial Services fall

    Rate sensitive indices such as Nifty Bank, Nifty Auto, Nifty Financial Services fell up to 2 per cent post announcements by Reserve Bank of India

    10:36 (IST)22 May 2020
    Bandhan Bank slips 4.45%; Nifty Bank index down over 2%

    Nifty Bank index slipped over 2 per cent or 373 points after RBI said that GDP growth will contract in FY21. Top index draggers are Bandhan Bank, Federal Bank, Axis Bank and ICICI Bank

    10:33 (IST)22 May 2020
    Reserve Bank of India extends moratorium on term loans

    The Reserve Bank of India has decided to extend the moratorium on term loans, that the central bank had proposed earlier, for another three months. This move by the RBI is keeping in mind the extended nation-wide lockdown to tackle the coronavirus pandemic. Clarity is awaited on moratorium extension on EMI's.

    10:31 (IST)22 May 2020
    Nifty Financial Service index drops 1.24%; Axis Bank top loser

    Nifty Financial Service index dropped 1.24 per cent dragged by PFC, Axis Bank, HDFC, ICICI Bank and Kotak Mahindra Bank after RBi Governor announced to slash repo rate by 40 bps

    10:29 (IST)22 May 2020
    Sensex, Nifty turn negative after surprise repo rate cut; check what’s keeping investors on edge

    Indian share market benchmark indices BSE Sensex and Nifty 50 slipped over half a per cent as RBI announced to slash repo rate by 40 bps on Friday. The 30-share Sensex was down 168 points or 0.45 per cent to trade at 30,795. While the broader Nifty 50 index was ruling at 9,054, down 53 points or 0.58 per cent today. The biggest losers on BSE Sensex were Tata Steel, HCL Tech, Power Grid, NTPC, ONGC and Axis Bank, down by 1.92%, 1.69%, 1.57%, 1.22%, 1.17% and 1%, respectively.

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    10:28 (IST)22 May 2020
    Voluntary retention route for Foreign Portfolio Investors

    The Reserve Bank of India has extended the voluntary retention route for FPI by 3 months to meet 75% utilisation of investment limits, Reserve Bank of India governor Shaktikanta Das said.

    10:22 (IST)22 May 2020
    GDP growth in FY21 expected to remain in the negative territory, as per the MPC

    Reserve Bank of India Governor, Shaktikanta Das said that the MPC expects the Gross Domestic Product for this fiscal to remain in negative territory, as it expects some pickup in the second half of the fiscal year.

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