Sensex (36971) / Nifty (11069)
We had a flat start yesterday despite SGX Nifty indicating a weakness. Index then consolidated in a slender range ahead of the policy with lot of stock specific moves. Post the budget day, majority of participants was expecting ‘no rate cut’ and change in stance. However, new governor came out with a surprise by granting 25bps cut in Repo rate and changed the stance to neutral which was very much on expected lines. Despite this, we did not see any notable reaction from the market; in fact, markets remained subdued with a hint of profit booking towards the fag end.
Eventually, the much awaited RBI monetary policy turned out to be a non-event. So going ahead, we would be back to our routines and index would probably start taking cues from the global bourses. Since, we are already above 11000; we remain upbeat and expect the index to head towards 11200 – 11250 in next few days. Hence, any decline up to 11000 – 10970 should now be construed as a buying opportunity. Yesterday, banking counters saw some profit booking; but, the structure remains positive and hence, we expect buying to re-emerge in this space soon.
Last few days’ movers ‘Auto’ and ‘Metal’ continues to outshine and it appears as if they are finally out of the slumber. Also, what encourages us is the participation of broader market since last couple of days.
Nifty Bank Outlook - (27387)
Post opening on a flat note, all eyes were on the outcome of the RBI monetary policy which was announced yesterday. The Committee decided to cut the repo rate by 25 bps and changed their stance to 'Neutral'. The Nifty Bank index did show some positive reaction on the announcement, but was unable to breakout above the resistance of 27625 which we have been mentioning about since last couple of days. The index gave up the gains and ended the day on a flat note.
Inspite of the breakout in the Nifty index seen on Wednesday, the banking space has not participated in the up move in last couple of sessions and hence, the Nifty Bank index is yet to give a breakout from its resistance. As highlighted earlier, the index has resistance in the range of 27535-27625 and banking space is expected to resume uptrend only post a breakout above the same. Traders are advised to trade in the index only above 27625 and till then, focussing on stock specific approach could be a better strategy. The near term supports for the Nifty Bank index are placed around 27200 and 26980.
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