Tale of the Tape 

Hiya everyone!

Nifty (-0.1%) and Sensex (-0.2%) collapsed in the final hours of trade to end at day’s low. On the other hand, Midcaps (+1%) and Smallcaps (+1.3%) sustained their recovery. The advance-decline ratio was in favour of the bulls (3:2).

Most sectors ended in the green. Real Estate (+2.2%) and Pharma (+2%) saw the most buying. FMCG (-1.6%) and Energy (-0.8%) witnessed profit booking.

RBI rate cut day went mostly as expected. More details below on why we can expect a December rate reduction and why Shaktikanta Das is upset with NBFCs.

Our ‘stocks at an ATH’ series continues today with MCX. Read below to understand the reasons behind its insane rally.

Divi’s Laboratories, Easy Trip Planners and Torrent Power saw big movements today. Check out their charts below to find out why.

Adani Enterprises was in focus after reports said it was in talks to raise $2 billion via the QIP route.

RITES jumped +7% after signing an MoU with Etihad Rail for ramping up UAE’s infrastructure. PS - SEBI RA Aditya Hujband has a target price of Rs 450 p/sh.

SKF India (+4%) gained after its board approved the demerging of its automotive & industrial businesses.

Akzo Nobel India jumped +9% over buzz about a potential Asian Paints buyout.

Ashok Leyland fell -3% intraday before recovering after CLSA downgraded the stock and cut its target price to Rs 188 p/sh vs Rs 258 earlier.

Welspun Enterprises (+3%) was up after bagging a Rs 1,989 cr wastewater solutions contract from Mumbai’s municipal authority.

Here are the closing prints:

Economy
RBI Monetary Policy: Key Takeaways

The Reserve Bank of India left interest rates unchanged for the TENTH time in a row today. Sounds like a snoozer, but it was mostly expected. Reason: Inflation is estimated to have increased to 5% in September, with the Middle East conflict also posing a huge question on global oil prices. So the RBI is still being a little cautious.

The far more important bit of news today is that the central bank has FINALLY signaled future rate cuts after shifting its policy stance to ‘neutral’. This is good news, and implies that we could expect a rate cut in December! 

Governor Shaktikanta Das however tempered expectations: “It is with a lot of effort that the inflation horse has been brought to the stable… We have to be very careful about opening the gate as the horse may simply bolt again.”

What about growth? The RBI retained its FY24 GDP growth forecast at 7.2%. This is also good news, especially because Q1’s GDP growth rate came in at a five-quarter low! They also retained the inflation forecast at 4.5% which means prices should cool off in H2FY25.

Finally, Das fired MAJOR warning shots at NBFCs pursuing unsustainable growth. ICYMI - several NBFCs including microfinance companies are witnessing a huge build-up of bad loans. This includes Fusion Finance and Ujjivan Small Finance Bank, both of which have raised red flags lately. While the governor didn’t single out anyone, he said that several NBFCs were “chasing excessive returns on their equity” and that if they didn’t self-correct, the RBI would take “appropriate action”. PS - investors beware, we don’t need to remind you how the RBI cracked down on unsecured lending!

TL;DR: We should get interest rate cuts soon, provided the situation in the Middle East doesn’t worsen. Healthy growth and a singular focus on inflation remain RBI’s key priorities! 

Stocktwits Specials
Buy The Dip In Railway Stocks?

Railway stocks have been the darlings of Dalal Street. But, after a sharp correction in recent months investors are staring at large portfolio drawdowns. Is it time to book profits or should you add more at current levels? Find out in our latest video below