Stock Market Highlights: Market ends higher for 7th day; bank index ends 3% higher; Wipro top Nifty gainer – CNBCTV18

Closing Bell: Market ends higher for 7th day; bank index ends 3% higher; Wipro top Nifty gainer

Indian shares ended higher on Friday led by gains in financials after the Reserve Bank of India (RBI) kept interest rates unchanged at 4 percent in the face of high inflation, while also retaining its accommodative stance.

The Sensex ended 327 points higher at 40,509 while the Nifty rose 79 points to settle at 11,914. For the week, the indices ended over 4 percent higher.

The RBI Governor Shaktikanta Das said the country’s gross domestic product may break out of the coronavirus-induced contraction and turn positive by the fourth quarter of 2020. He added that the GDP is expected to contract by 9.5 percent in FY21, with risks to the downside.

Post the policy, the banking and financial indices surged on liquidity boosting measures. The Nifty Bank surged 2.8 percent while the Nifty Fin Services jumped 1.8 percent. Nifty IT also added 0.6 percent for the day. However, Nifty Realty shed 1.6 percent and the pharma index was down 1.3 percent. Nifty Auto, Nifty FMCG and Nifty Metal also ended the day in the red.

On the Nifty50 index, Wipro, ICICI Bank, Axis Bank, SBI, and HDFC Bank were the top gainers while Grasim, Hindalco, UPL, Sun Pharma and SBI Life led the losses.

Government likely to invite bids for CONCOR stake sale this month

On-tap TLTROs good if for mid and small NBFCs: Sundaram Finance

The Reserve Bank of India has announced that it will conduct on-tap TLTROs (Targeted Long-Term Repo Operations) of Rs 1 lakh crore for up to three years. This will be done at a floating rate linked to the repo rate and will be available until March 2021. The TLTRO scheme will be reviewed on the basis of the response received. The liquidity availed from this scheme will be used to extend bank loans towards sectors that need growth. Commenting on this move TT Srinivasaraghavan, MD of Sundaram Finance said, “For companies like us liquidity is comfortable, pricing is comfortable. I think this is more about liquidity for the smaller and midsized NBFCs. So, if on-tap TLTRO would go somewhere towards helping them, then that’s the big one,” he said.

Stock Update: Zen Technologies’ shares traded nearly 4 percent higher to Rs 84.30 per share on the NSE after the company won an order from a government customer, for an annual maintenance contract for an approximate value of Rs 40 crore.

The contract is for a period of five years, the company said in an exchange filing. It has also received an export order for the supply of its simulators to an army in West Africa. The contract is valued at $1.4 million and has been partially executed.

RTGS system for real time fund transfer to become 24×7 from December, says RBI

The Reserve Bank of India (RBI) on Friday proposed to start the round-the-clock availability of real-time gross settlement (RTGS) facility from December 2020 for swift payments.

This will improve the ease of doing operations, Reserve Bank of India (RBI) Governor Shaktikanta Das said while announcing the decisions taken by the central bank’s Monetary Policy Committee (MPC).

“India will be among very few countries globally with a 24x7x365 large value real-time payment system,” Das added

RTGS refers to funds transfer system that allows for the instantaneous transfer of money and/or securities. RGTS is the continuous process of settling payments on an individual order basis without netting debits with credits across the books of a central bank. Read more

European markets modestly higher as investors track U.S. stimulus prospects

European markets edged higher Friday morning as investors monitor talks on fresh coronavirus relief package stateside. The pan-European Stoxx 600 added 0.4 percent in early trade, with retail stocks adding 1.1 percent to lead gains as most sectors and major bourses entered positive territory.

U.S. President Donald Trump revived hopes of a stimulus deal on Thursday, telling Fox News that talks between the White House and Congress were back underway and that there was a good chance an accord could be reached.

Vedanta Delisting FAQs: Is it necessary to participate, what happens in case of failure?

Friday i.e. October 9 is the final day of the reverse book building process in which public shareholders can tender the shares of Vedanta as the company prepares to get delisted from Indian bourses. Vedanta chairman Anil Agarwal, in an interview with CNBC-TV18, said the company will go for a counteroffer for the buyback of shares “if need be”. The floor price for tendering the shares has been set at Rs 87.25 by the company.

Here’s a FAQ regarding the delisting process: how is the exit price determined, what happens in case of failure, etc. Let’s take a look

What is the background to the Delisting Offer?

Vedanta expressed its intention to acquire the shares and consequently voluntarily delist the from the Stock Exchanges in accordance with the Delisting Regulations and if such delisting is successful, then to also delist the American depositary share (ADS) from New York Stock Exchange (NYSE) and deregister the Company from the Securities and Exchange Commission (SEC), subject to the requirements of the NYSE and the SEC. Continue reading

Now, your home loans may be cheaper if you make a larger down payment

The Reserve Bank of India has rationalised risk weights — or the capital that banks put aside after lending — for all housing loans, in a move that could nudge lenders into extending more credit as well as bring down home loan rates for some buyers.

“Recognising the criticality of real estate sector in the economic recovery… it has been decided… to link risk weights only with loan-to-value ratios for all new housing loans sanctioned up to March 31, 2022. Such loans shall attract a risk weight of 35 percent where LTV is less than or equal to 80 percent, and a risk weight of 50 percent where LTV is more than 80 per cent but less than or equal to 90 percent,” the RBI today said after announcing the monetary policy.

Put simply, if an individual puts more than 20 percent of a house’s value as down payment, the bank will have to keep aside a lower amount of money for extending the loan.

This will also allow banks to offer cheaper home loans, bankers said. Click here to read more

Housing Finance stocks surge after RBI eases risk weights on individual home loans

The central bank provided boost to the real estate sector after easing risk weights on individual home loans. All individual housing loans, according to the shall attract a risk weight of 35 percent, if their loan-to-value ratio is at 80 percent or lower, said the RBI’s circular. In case of home loans, where the LTV ratio is higher than 80 percent but less than or equal to 90 percent, the risk weights will be higher at 50 percent.

At 1 pm, the shares of HDFC traded 2 percent higher to Rs 1,990.25 per share on the NSE, while LIC Housing Finance rallied 7 percent to Rs 307.85. Shares of CanFin Homes and Repco Finance rose 3 percent and 8 percent respectively.

Exclusive: Will go for a counteroffer if need be, says Vedanta Chairman Anil Agarwal

Vedanta Chairman Anil Agarwal, in an interview with CNBC-TV18, said the company will go for a counteroffer for the buyback of shares “if need be”.

The floor price for tendering the shares has been set at Rs 87.25 by the company.

“We will look at the price which we can afford and will look at the price range once all shares are tendered,” Agarwal said, adding that the delisting process has seen a very good response.

A short while earlier, Life Insurance Corporation (LIC) MD Vipin Anand, in an interview with CNBC-TV18, said that Rs 320 is a fair price for Vedanta delisting. LIC has a 6.37 percent stake in Vedanta, and Anand said the insurer “will not tender Vedanta shares below fair value.” Click here to read more

Abhimanyu Sofat of IIFL Securities on RBI policy announcement: Despite not cutting benchmark interest rate, RBI has announced a significantly dovish monetary policy will slew of measures. Doubling of size of open market operations to Rs. 20,000 cr, RBI participation in state development loans, allowing co-origination of loans by HFCs are combined big ticket announcements for both bond market and financial sector stocks. Housing finance companies, small NBFCs are likely to outperform as a result of these announcements. RBI is expecting a significant fall in inflation in H2 which has been higher due to supply chain challenges to justify its dovish stance. Extension of HTM limits by additional one year, on tap TLTRO are going to provide significant relief to the bond market. Investors can increase their allocation to the BFSI space as we see more availability of money at lower cost to help in strong rebound in the sector.

Amar Ambani, Senior President and Head of Research – Institutional Equities, YES SECURITIES on RBI policy

“RBI’s status quo on rates was along expected lines, given the elevated inflation. But the MPC clearly delivered accommodative moves through non-interest rate tools. As an endeavor to lower the yields in bond markets, the central bank announced to expand weekly OMO purchases, include State Development Loans as part of its purchases and TLTRO of Rs1 trillion. We believe, over time, Gsec 10-year yield will drop closer to 5%. Rationalization of risk weights on Individual housing loans, now linked only to LTVs, for all new HL sanctioned till March 2022, is a positive for banks. But HFC not mentioned may be a near-term dampener for housing finance stocks. We see possibility of further scope of 25-50 basis points cut in Repo policy rates.”

Will go for a counteroffer if need be, says Vedanta Chairman Anil Agarwal

Vedanta Chairman Anil Agarwal, in an interview with CNBC-TV18, said the company will go for a counteroffer if need be. “Will look at the price which we can afford and will look at the price range once all shares are tendered,” the Chairman said, adding that the delisting process has seen a very good response. Today is the final day of the reverse book building process in which public shareholders can tender the shares of Vedanta as the company readies to get delisted from Indian bourses.

GOCL Corporation’s shares surge 9% on order win worth Rs 187 crore

GOCL (Gulf Oil) Corporation’s shares surged up to 9 percent on Friday after its wholly-owned subsidiary IDL Explosives won an order to supply explosives and accessories worth Rs 186.8 crore from Singareni Colleries.

The stock surged as much as 9 percent to Rs 196 apiece on the NSE. At 11:06 am, the share price was trading 5.29 percent higher to Rs 189.15.

The order win is over for a period of two years, said the company’s exchange filing. The cost of the project also included an escalation clause, added the filing.

Since March lows, the stock has surged up to 81 percent to current price levels.

Banks, financial stocks rise post RBI policy decision; Nifty Fin Services up 1.9%

Banks and finance stocks rose on Friday after the Reserve Bank of India kept the repo rate unchanged at 4 percent and maintained an accommodative stance. It proposed to start the round-the-clock availability of real-time gross settlement (RTGS) facility from December 2020 for swift payments. This will improve the ease of doing operations, RBI Governor said. Post the policy announcement, the Nifty Fin Services index surged 1.9 percent while Nifty Bank jumped 1.6 percent. In comparison, the benchmark Nifty was up around half a percent. NBFCs like M&M Finance, HDFC, and Bajaj Finance were up 2-4 percent while banking stocks, ICICI Bank, Bandhan Bank, RBL Bank, HDFC Bank, and Axis Bank also gained over 1.5 percent each.

Lakshmi Vilas Bank jumps 16% on receiving a non-binding offer from the Clix Group

Shares of Lakshmi Vilas Bank surged 16 percent on Friday after the lender announced that it had received an indicative non-binding offer from the Clix Group. In June, the lender had received a preliminary, non-binding letter of intent (LoI) from Clix Capital Services Private Ltd & Clix Finance India Private Ltd. CNBC-TV18 had reported quoting sources that the lender may be able to raise Rs 1,200- Rs 1,500 crore of investment from AION Capital-backed NBFC Clix Capital. In October last year, the Reserve Bank of India (RBI) had turned down Lakshmi Vilas Bank’s proposed merger with Indiabulls Housing Finance.

Top gainers and losers post RBI policy

Market slips from highs as RBI in its first official estimate, expects GDP to contract by 9.5% in FY21

In its first official estimate, RBI expects FY21 GDP growth to contract by 9.5%

Sectoral trend post RBI policy decision

Market Update: The Sensex and Nifty were trading marginally higher after the RBI kept repo rate unchanged. The Sensex was tradinh 95 points higher at 40,278 while the Nifty was up 33 points tp 11.868.

Vedanta delisting: Rs 320 is the fair price, says LIC chairman

Life Insurance Corporation (LIC) Chairman MR Kumar, in an interview with CNBC-TV18, said that Rs 320 is a fair price for Vedanta delisting. LIC has a 6.37 percent stake in Vedanta. Today is the final day of the reverse book building process in which public shareholders can tender the shares of Vedanta as the company readies to get delisted from Indian bourses. Media reports suggest share tendering has been tepid so far. The reverse book-building process for public shareholders to tender their shares started on October 5 and will conclude on October 9.