Sensex rises over 100 points ahead of RBI monetary policy outcome, Nifty above 12,100; HCL Tech, ITC, Maruti top gainers

Sensex jumped over 100 points in the opening session on Thursday ahead of the outcome of Reserve Bank of India’s monetary policy review amid strong cues from global markets.

#CNBCTV18Market | Market opens higher amid positive global cues & ahead of #RBIPolicy, Nifty above 12,100 while Nifty Bank above 31,000

For more LIVE updates, log on to https://t.co/ubuE99sX7F pic.twitter.com/IbmbeJtun7

— CNBC-TV18 (@CNBCTV18Live) February 6, 2020

The 30-share BSE index was trading 125.32 points or 0.30 percent higher at 41,267.98, and the broader NSE advanced 46.20 points, or 0.38 percent, to 12,135.35.

In the previous session, Sensex ended 0.87 percent or 353.28 points higher at 41,142.66. While, Nifty rose 109.50 points, or 0.91 percent, to settle at 12,089.15.

Meanwhile, on a net basis, foreign institutional investors bought equities worth Rs 248.94 crore, while domestic institutional investors purchased shares worth Rs 262.75 crore on Wednesday, data available with stock exchanges showed.

HCL Tech, ITC, Maruti, Bajaj Finance, Hero MotoCorp and TCS were the top gainers in the Sensex pack. While, Kotak Bank, NTPC, PowerGrid and HDFC were the laggards.

#CNBCTV18Market | Here are the index losers. Tata Motors amid top losing stocks on the ##Nifty after a 11% surge yesterday pic.twitter.com/QkJT6Ck99I

— CNBC-TV18 (@CNBCTV18Live) February 6, 2020

According to traders, investors are bullish ahead of outcome of the Reserve Bank of India’s (RBI) sixth bi-monthly monetary policy statement for 2019-20. This will be the central bank’s last monetary policy for the current financial year.

According to experts, the RBI is likely to maintain status quo on rates as well as its monetary policy stance, and to continue an accommodative stance to support growth.

Further, strong gains in global markets have also boosted investor sentiment here, traders said,

Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with significant gains.

Exchanges on Wall Street too ended higher on Wednesday.

Brent crude oil futures rose 1.65 percent to $56.19 per barrel.

Rupee opens at 71.22 against dollar

The rupee opened on a cautious note at 71.22 against the US dollar in opening trade on Thursday, registering a rise of 3 paise over its previous close as investors exercised caution ahead of the RBI’s monetary policy outcome.

#Rupee opens mildly lower Vs yesterday's close pic.twitter.com/VZxDL4l2Ps

— CNBC-TV18 (@CNBCTV18Live) February 6, 2020

The Reserve Bank of India (RBI) is scheduled to announce the outcome of its sixth bi-monthly monetary policy statement for 2019-20 later in the day.

Forex traders said positive opening in domestic equities and foreign fund inflows supported the local unit, but rising crude oil prices and strengthening of the US dollar weighed on the domestic currency.

The rupee opened at 71.22 at the interbank forex market, then lost ground and fell to 71.28, down 3 paise over its last close. The rupee had settled at 71.25 against the US dollar on Wednesday.

Brent crude futures, the global oil benchmark, rose 1.70 percent to $56.22 per barrel.

Foreign institutional investors remained net buyers in the capital markets, as they purchased shares worth Rs 248.94 crore on Wednesday, as per provisional data.

Domestic bourses opened on a positive note Thursday with benchmark indices Sensex trading 197.37 points up at 41,340.03 and Nifty up 44.50 points at 12,133.65.

Asian stocks edge up

Asian stocks edged up on Thursday, cheered by record closes in Wall Street benchmarks after encouraging economic data, although investors kept a wary eye on the developments in the coronavirus outbreak.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.14 percent while Japan’s Nikkei rose 2.07 percent.

Mainland Chinese shares edged up, with the bluechip CSI300 index up 0.87 percent, helped by policymakers’ efforts to prevent heavy selling, including liquidity injections and de facto restrictions on selling.

“It is difficult for investors to sell Chinese shares now given the authorities’ stance is very clear,” said Naoki Tashiro, president of TS China Research.

“Still, until the spread of the virus stops, market stabilisation steps won’t completely change investor psychology.”

On Wall Street, far from the epicentre of the outbreak, the mood was brighter as the S&P 500 gained 1.13 percent to a record close of 3,334.69 while the Nasdaq Composite added 0.43 percent to 9,508.68, also a record high.

The ADP National Employment Report showed private payrolls jumped 291,000 jobs in January, the most since May 2015, while a separate report showed US services sector activity picked up last month. Both indicators suggest the economy could continue to grow this year even as consumer spending slows.

Traders also cited vague rumours of a possible vaccine or a drug breakthrough for the coronavirus as a trigger for Wednesday’s stock rally, although they also said such catalysts were likely to simply be an excuse for short-covering.

The World Health Organization played down media reports on Wednesday of “breakthrough” drugs being discovered to treat people infected with the new coronavirus.

Another 73 people on the Chinese mainland died on Wednesday from the virus, the highest daily increase so far, bringing the total death toll to 563, the country’s health authority said on Thursday.

“Despite all the efforts by the Communist Party, the virus is becoming a major global disaster. Considering workers usually start to return to hometown about a week before the Lunar New Year, many patients must have left Wuhan before its lockdown on Jan. 23,” TS China Research’s Tashiro said.

Statistics from China indicate that about 2 percent of people infected with the new virus have died, suggesting it may be deadlier than seasonal flu but less deadly than SARS, another reason investors remained relatively calm.

“The coronavirus is continuing to spread so we need to remain cautious. But markets now appear to think that there will be a quick economic recovery after a short-term slump,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

The 10-year US Treasuries yield rose back to 1.654 percent from a five-month low of 1.503 percent set last Friday.

In the currency market, the safe-haven Swiss franc and the yen retreated.

The franc eased to 0.9738 franc per dollar, having lost 0.4 percent on Wednesday.

The yen stepped back to 109.98 yen, compared with a three-week high of 108.305 hit on Friday.

The euro stood flat at $1.0998, having shed 0.4 percent in the previous session.

In commodities, U.S. West Texas Intermediate (WTI) crude gained 2.17 percent to $51.85 per barrel, extending its rebound from a 13-month low of $49.31 touched on Tuesday.

Still, it is down about 15 percent so far this year.

Copper, considered a good gauge on the health of the global economy because of its wide industrial use, showed some signs of stabilisation although it remained depressed overall.

Shanghai copper extended its rebound into the third day, rising 1 percent from 33-month low hit earlier this week. It is about 5 percent below its levels just before the start of Lunar New Year holidays.

“One has to wonder whether China can meet its trade agreement with the U.S. to increase imports by $200 billion, which looked very difficult to begin with,” said a manager at a U.S. asset management firm, who declined to be named because he is not authorised to speak about China.

“Before the outbreak, a mini goldilocks market was everyone’s consensus. But we have to see whether we need to change such a view,” he added.