RBI’s Revised GDP Forecast Sparks Nifty50’s Upward Trend📈

At the close, the Nifty 50 was at 23,290.15 up by 2.05%

The NSE Nifty 50 index commenced the day on a positive note, marking a gain of 2.05% and closing in the green territory. Surging above the 23,250 mark, the Indian benchmark indices recorded their third consecutive session of gains on June 7. This impressive performance was bolstered by a broad-based rally, with the Nifty surging by 468.75 points or 2.05%.

Market sentiment remained upbeat, fueled by positive developments on both the monetary policy and political fronts. The Reserve Bank of India (RBI) revised its forecast for FY25 GDP growth upwards to 7.2%, while maintaining interest rates unchanged for the eighth consecutive term. This decision, coupled with anticipation of political stability at the centre, contributed to a sustained rally in the domestic market.

The RBI’s Monetary Policy Committee (MPC) opted to keep the key repo rate unchanged at 6.5% and maintained its stance of ‘withdrawal of accommodation’. This decision, supported by an upward revision in India’s GDP growth forecast for FY25, underscores the central bank’s commitment to balancing economic stability and inflation management.

The RBI’s decision to maintain interest rates signals economic stability, instilling confidence among investors. Furthermore, measures introduced to enhance liquidity in the banking system are expected to stimulate lending activity and drive profitability for financial institutions. The upward revision in GDP growth forecasts for FY25 has alleviated market concerns, particularly amidst global uncertainty and the recent formation of a new government.

The Nifty 50’s remarkable performance, reflects the prevailing bullish momentum in the market. Positive developments in monetary policy and political stability have fueled investor optimism, driving the domestic market to surpass previous records. The RBI’s commitment to managing inflation while supporting economic growth further strengthens market sentiment, paving the way for sustained upward movement in the coming sessions.

Bank Nifty: Up by 1.04%

The Bank Nifty commenced the trading session on a positive note, opening in the green and posting a gain of 1.04%. Closing at 49,803.20, the index continued its upward trend, ending the day in positive territory. Similarly, the BSE Sensex displayed robust performance, recording a notable increase of 2.16%. Closing at a green of 76,693.36, the Sensex mirrored the positive sentiment witnessed across the market.

In the sectoral domain, the IT sector experienced a significant boost, rising by 3.37%. Leading the charge was Wipro Ltd., which saw its shares increase by an impressive 4.99%. This remarkable performance highlights Wipro’s strong market position and investor confidence. Following closely, Tech Mahindra Ltd. enjoyed a gain of 4.18%, reflecting its robust growth and strategic advancements. Persistent Systems Ltd. also showcased a solid performance with a 4.11% rise, underscoring its consistent upward trajectory in the market.

Foreign Institutional Investors (FII/FPI) showcased a bullish stance with a buy value of Rs. 19,943.97 crore and a sale value of Rs. 15,552.95 crore, resulting in a net value of Rs. 4,391.02 crore.

On the other hand, Domestic Institutional Investors (DII) exhibited a contrasting trend, recording a buy value of Rs. 15,564.17 crore and a sale value of Rs. 16,853.92 crore, resulting in a net value of -Rs. 1,289.75 crore.

Bank Nifty

The Nifty Banking sector had some gainers and some losers for the day.

The gainers included Bandhan Bank with a 2.22% increase, State Bank of India with a 1.51% increase, Axis Bank with a 1.46% increase, AU Bank with a 1.35% increase, and Kotak Bank with a 1.01% increase.

Conversely, there were no losers today in the Bank Nifty. These outcomes indicate that all banking stocks performed well throughout the day.

Indian Rupee Strengthens on Dollar Sales and Positive Asian Market Sentiment

The Indian rupee concluded the week on a stronger footing, bolstered by dollar sales from domestic corporates and a general uptrend in most Asian currencies. Closing at 83.3725 against the U.S. dollar, the rupee exhibited resilience, marking an improvement from its previous close of 83.4725. Notably, the currency recorded a marginal week-on-week increase of 0.1%.

Non-deliverable forwards suggest a largely flat trajectory for the rupee, hovering around the previous session’s closing rate of 83.4725. Market analysts predict minimal fluctuations, with a low probability of the dollar/rupee exchange rate surpassing 83.50. Any downward movement is anticipated to be modest, within a range of 3-4 paise.

Regarding the Reserve Bank of India’s (RBI) upcoming policy decision, experts anticipate no significant market impact. With robust economic growth and inflation slightly above the target level, it is unlikely that the RBI will alter the policy rate or stance. The focus of investors will primarily be on the central bank’s commentary on inflation and liquidity management.

The performance of the rupee’s Asian counterparts, which mostly demonstrated strength, alongside a marginal decline in the dollar index, contributed to the rupee’s positive momentum. Market participants eagerly awaited the release of the monthly U.S. jobs report, considering its potential impact on the Federal Reserve’s interest rate outlook amidst prevailing uncertainties.

The Indian rupee’s recent strengthening against the U.S. dollar, fueled by domestic dollar sales and favorable Asian market trends, reflects investor confidence. While projections indicate stability in the near term, attention remains focused on the RBI’s policy stance and global economic developments, particularly the forthcoming U.S. labor market data and its implications for monetary policy.

Stocks Highlights

Mahindra & Mahindra Ltd. experienced a significant uptick, with its share price increasing by 5.38% from its previous close of Rs 2,699.85, reaching a last traded price of Rs 2,845.00. This notable rise reflects strong investor confidence. Intraday data shows that in the past 19 years, only 1.1% of trading sessions saw intraday declines exceeding 5%, underscoring the stock’s resilience.

The company delivered a robust Return on Equity (ROE) of 17.02% for the year ending March 31, 2024, surpassing its five-year average of 11.97%. This performance indicates efficient management and profitability. Mahindra & Mahindra Ltd. allocated 5.38% of its operating revenues to interest expenses and 7.64% to employee costs for the same period.

A bullish signal emerged on June 5, 2024, with a daily MACD crossover. Historically, this signal has resulted in an average price gain of 4.05% within 10 days over the past decade, favoring the bulls.

Conversely, SBI Life Insurance Company Ltd.’s share price declined by 1.03%, falling from Rs 1,442.85 to Rs 1,427.95. Intraday data over the last six years reveals that only 0.6% of sessions experienced intraday gains above 5%.

SBI Life Insurance has maintained a zero-debt status for the past five years, highlighting its strong financial health. The company’s annual revenue growth of 62.23% outperformed its three-year CAGR of 17.13%, showcasing robust business expansion.

A bullish signal was noted with a 200-day moving average crossover yesterday. Historically, this has resulted in an average price gain of 5.3% within 30 days over the last five years, indicating positive momentum for the stock.

Advance Decline Ratio

Today, the advance-decline ratio was 4.40, and the market breadth was positive. The volatility index India Vix increased by 0.49 to settle at 16.88 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 2139
Decliners – 486
52Wk High – 122
52Wk Low – 20
High Band Hitters – 179
Low Band Hitters – 35
200d SMA – 21131
50d SMA – 22469
20d SMA – 22596

Top Gainers and Losers Stocks

The top gainers were M&M (+5.38%), Wipro (+4.99%), Tech Mahindra (+4.18%), Infosys (+3.99%), and Tata Steel (+3.95%).

The top losers were SBI Life (-1.03%), and Tata Consumer (-0.43%).

Top Gainers and Losers Sectors

The top gainers sector were IT (+3.37%), Auto (+2.56%), Oil & Gas (+2.10%), Metal (+2.09%), and Realty (+2.08%).

SECTORS – NOTABLE ACTION
IT +3.37%
AUTO +2.56%
OIL & GAS +2.10%

Stocks Ban List

(SEBI) F&O ban list (ZEEL open at +153.55 and close at +156.25) are not currently on the stock exchange.

A stock enters the Ban List if its MWPL is above 95%. Implying that, Ban List shows the Futures and Options (FnO) stocks whose combined open interest in all FnO contracts for a given period crosses 95% of Market-Wide Position Limit.

SAIL, HINDCOPPER, INDIACEM, and PEL stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 22850 to 23500 is the Nifty 50 trading range.

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This article is only for educational purposes and is not an investment advice.