Stock Market: Relief rally extends with RBI cues; yield spike brings fear factor

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By S Jha

New Delhi, October 6: In a span of two sessions, Nifty has logged in gains of almost 300 points after tanking by four per cent on the back of relentless selling by foreign funds. The vote for rate pause by the monetary policy meeting brought further relief to the bulls, who are already battered due to September beating.

But the indices didn’t fly as the fear of bond yield spike reared its head in the afternoon session. The 10-year bond yield sharply climbed by afternoon. Later, the strong job data in the US also brought the bond yield back in action, as the rise tanked the Dow Jones in the early session.

The decision of the RBI to stay with a rate pause mode accompanied by positive commentary even while concerns on uneven Monsoon spread brought stability in the market. The cooling of the crude oil price has already lifted the morale of the bulls on the street. From almost $95 per barrel, the crude oil price has tanked to about $85 per barrel. The vegetable prices have also sobered largely even while the prices of cereal pose threat to inflation.

With the macroeconomic data suggesting cooling of the concerns, the bulls took the front-foot stance on the bourses but they were not euphoric because of the lack of leadership in the indices. Reliance Industries continues to languish at the support level, while HDFC Bank and ICICI Bank seem to be on the snooze modes.

Yet, Bajaj financial twins were the showstoppers on the street, as both the scrips trended following the news break of the fund raising as the financial behemoths hear up to take on the Jio Finance challenge. Bajaj Finance broke out of the all-time high ceiling to go trending in the session.

Godrej Industries too reacted to the news of the various ranks in the family agreeing on peace plan to gain almost 20 per cent in the day. The auto sectors extended their gains marginally, but the day belonged to the realty and the housing finance firms. The foreign institutional investors reported a net sell of only Rs 70 crores in the day against heavy selling since September.