Nifty50: 17,589 ▼ 164 (-0.9%)
Sensex: 59,806 ▼ 541 (-0.9%)
Dear reader !
Soon you will be able to spot ‘Bahu Balli’ on Indian highways.
Hold your horses. It is not what you think.
It's a 200 metre-long bamboo crash barrier tested on a highway in Maharashtra to keep vehicles in the lane and prevent animals from straying on highways.
While being hailed as an environment-friendly alternative to steel, it could also offer an economic opportunity to the bamboo sector.
You know what else could use a crash barrier these days? Stock market.
- After a flat opening, the markets ended lower.
- Out of the Nifty50 pack, 39 stocks declined.
- The rate hike fears have triggered uncertainty.
All the Nifty sectoral indices ended in the red, except Metal (+0.06%). Auto (-1.83%) and Realty (-1.17%) were the top losers.
| Top gainers | Today's change |
| Tata Steel | 108 ▲ 1.7 (+1.6%) |
| L&T | 2,193 ▲ 22 (+1.0%) |
| Apollo Hospitals | 4,412 ▲ 36 (+0.8%) |
| Top losers | Today's change |
| Adani Enterprises | 1,941 ▼ 98 (-4.8%) |
| M&M | 1,245 ▼ 44 (-3.4%) |
| SBI Life | 1,097 ▼ 31 (-2.8%) |
What’s trending
⭐ JSW Steel’s production jumps
The steel maker (+0.4%) has reported a 10% YoY rise in its crude steel production to 17.3 lakh tonnes in February 2023. This was aided by a 9% rise in the production of flat rolled products.
⭐ PSP Projects bags multiple orders
Shares of the construction company(+3.0%) rose after it received multiple work orders worth ₹123 crore. These orders were in institutional, industrial and residential categories. The projects involve design and construction of a tower and industrial shed in Ahmedabad.
⭐ Sequent Scientific calls off acquisition
Shares of the pharma company (+19.9%) rallied 20% today after it said that it won’t acquire Tineta Pharma. According to the management of the company, the share purchase agreement failed to materialise, leading to termination of the deal. In November 2022, the company had announced plans to acquire 100% stake in Tineta Pharma.
⭐ DreamFolks eyes railway travel
The airport lounge operator (+1.3%) is reportedly looking at the railway space to drive future growth. The company currently operates 12 railway lounges and expansion plans are in the pipeline. As per the management, growing demand for high-quality and convenient services during train travel offers high growth potential. Also, initiatives like the government’s focus on privatisation and increasing penetration of credit cards will benefit the industry.
In Focus
Interest rates are rising: Why and what’s the impact?
It’s not just you and me – but even the Indian bond (debt) markets are feeling the heat of high inflation. Bond yields (interest paid by a borrower) of the government’s one-year debt are on the rise. Currently, interest rates on one-year government bonds stand at 7.48%. This is the highest since October 2018.
Here’s a look at the reason for this and its impacts:
Reason for the rise in yields
Let’s set the context first. The Indian central bank has been increasing rates to tackle price rise. In February, India’s retail inflation stood at 6.52% – above the RBI’s target of 6%. This was led by higher food inflation with the cereal prices rising sharply. And experts believe that prolonged summer and poor monsoon could impact crop yield, which in turn could further fuel food inflation.
Against this backdrop, the RBI is expected to continue its battle against inflation by increasing the rates. Taking cues from this, the interest rates on bonds have also been on the rise.
The impact of rising interest rates
The rising interest could hurt the margins or profitability of banks and non-banking finance companies (NBFCs). ICYDK, when the RBI increases rates, the banks also have to hike the rate of deposits and bonds. Basically, this money is raw material for lenders and hence the increase in rates means they need to pay higher interest on the deposits.
So, when the cost of raw material goes up, banks and NBFCs also lend at a higher rate. This means capex heavy sectors like realty, steel and infrastructure will incur higher interest rates on loans. So, the cost of financing projects also goes up.
Banks and NBFCs also lend money to people like you and me to buy goods and services. The increase in rates means our EMIs could also go up. It remains to be seen how rising interest rates impact spending or consumption. Till now, despite the interest rate hikes, banks’ credit or loan growth (16% YoY in January) has remained robust.
Now, with the inflation above the RBI’s target of 6%, all eyes will be on the next monetary policy committee meeting.
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Phrase of the day
Going Long
When you buy a stock, futures or an option contract with the hope that its price will rise, it is called going ‘long’. When should you go long, find out from this chapter What does going Long mean?
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