BSE Sensex ands Nifty 50 ended a volatile session in red after RBI MPC hiked repo rate by 50 bps to 4.9% on Wednesday, one day before weekly F&O expiry. BSE Sensex fell 215 points or 0.4 per cent to settle at 54892, while Nifty 50 index shut shop at 16356, down 60 points or 0.4 per cent. Index heavyweights such as Reliance Industries Ltd (RIL), Bharti Airtel, ITC, ICICI Bank, Infosys, and Axis Bank contributed the most to indices’ loss. Broader markets also performed in line with equity frontliners. S&P BSE Midcap fell 0.15 per cent or 34 points to 22,531, while S&P BSE SmallCap index lost 0.3 per cent or 87 points to settle at 25,978. India VIX fell 2.87 per cent, taking the volatility index below 20 level, at 19.84.
Ajit Mishra, VP – Research, Religare Broking
Deepak Jasani, Head of Retail Research, HDFC Securities
Absence of fresh negatives resulted in a relief rally in equity and bond markets post the announcement of MPC meet outcome. However this rally was used by investors/traders to lighten their positions. Nifty expanded the high low range compared to the previous day and closed lower. We once again saw buying at lower levels, which suggest that institutional buying dries up at some levels. However a higher close still eludes us. 16293-16506 could be the band for the Nifty in the near term.
Vinod Nair, Head of Research at Geojit Financial Services
RBI turned realistic by withdrawing their accommodative stance, realising the need for front-loaded action and increased inflation forecast by 100bps to 6.7%. On the bright side, there were some positive points like no increase in CRR, economic growth was maintained healthy at 7.2% and no additional measures were announced to reduce the liquidity of the banking system. However, the focus shifted to the global market, which is anticipating a hawkish Fed policy, stated next week.
Kunal Shah, Senior Technical & Derivative Analyst, LKP Securities
The RBI policy turned out to be a non-event for the index as it ended on a flat note. The index is stuck in a broad range between 34,500-36,000 levels where a significant amount of put and call writing has been witnessed. The undertone remains bearish as long as it stays below the immediate hurdle of 35,500.
Om Mehra, Research Associate, Choice Broking
Technically, Nifty has formed a bearish candlestick on the daily timeframe. Bulls remain in trap from past few days as Index failed to close in green at least two continuous days. From the hourly chart, Nifty 16500 levels have turned into resistance from the support suggesting further weakness amid weekly expiry. However view negated closing and sustaining above 16550 levels. Indicators such as ATR and ADX remained on the weaker side on the daily chart as well. Advance Decline Ratio remained at 0.73 percent indicating slight dimness too. The Nifty may find support around 16100 followed by 16000 levels, on the upside 16550 may act as an immediate hurdle. On the other hand, Bank nifty has support at 34200 levels while resistance at 35700 levels. Overall, Nifty is showing weakness on a chart, Investors and traders are advised to work with option strategies to neutralize the volatility amid weekly expiry.
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