NSE Nifty Extends Winning Streak to Fifth Session on Surprise RBI Decision

At the close, the Nifty 50 was at 17,599.15 up by 0.24%

April 6th, 2023, the Nifty 50 index opened at a lower level compared to the previous day’s closing level and then rose by 0.24 percent to close in the green. The index closed near 17600, which indicates an overall positive sentiment in the market on that day.

Indian shares have continued to log gains for a second consecutive week, with the help of real estate and financial stocks. This follows the Reserve Bank of India’s decision to keep its key policy rate unchanged, which was a surprising move that may have boosted investor sentiment.

Real estate and financial stocks are among the sectors that may benefit from the RBI’s decision to maintain the status quo on the policy rate. The real estate sector may benefit from lower borrowing costs, which can make it easier for homebuyers to obtain mortgages and for developers to access funding. Meanwhile, the financial sector may benefit from lower interest rates, which can make it easier for companies to borrow money and for consumers to access credit.

Bank Nifty: Up by 0.10%

Bank Nifty index opened lower compared to the previous day’s closing level, but then rose by 0.10 percent to close in the green at 41,041.00. This suggests that the banking sector performed relatively well on that day. BSE Sensex opened lower but then rose by 0.24 percent to close at a high of 59,832.97, which indicates an overall positive sentiment in the market.

April 6th, 2023, some sectors in the Indian stock market performed better than others. The realty index, which tracks the performance of real estate companies, gained 3 percent, indicating a positive sentiment in the realty sector.

Similarly, the auto index, which tracks the performance of automobile companies, gained 1 percent, suggesting a positive sentiment in the automobile industry. The pharma, capital goods, oil & gas, and power sectors also performed well, with each gaining 0.5 percent.

On the other hand, some sectors did not perform as well. The FMCG (Fast-Moving Consumer Goods) sector, which includes companies that sell essential household items, the IT (Information Technology) sector, which includes technology-related companies, and the metal sector, which includes companies that produce metal products, were down 0.5 percent each.

Bank Nifty

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

The gainers included AU Bank with a 1.90% increase, IndusInd Bank with a 1.57% increase, Punjab National Bank with a 1.07% increase, State Bank of India with a 0.90% increase, and Bandhan Bank with a 0.87% increase. On the other hand, the biggest losers in the sector included Federal Bank with a 1.21% decline, ICICI Bank with a 1.09% decline, Axis Bank with a 1.07% decline, and Bank of Baroda with a 0.06% decline. These results suggest that some banking stocks performed better for the day.

Buzzing

Monetary Policy Committee (MPC) in India has surprised the market by deciding to keep the policy rate unchanged at 6.5 percent. This marks a pause in repo rate hikes after six consecutive rate hikes since May 2022, which had increased the policy rate by 250 basis points.

It’s worth noting that these rate hikes were preceded by the introduction of a standing deposit facility (SDF) at 40 basis points higher than the fixed rate reverse repo. Therefore, the effective rate hike since April of last year has been 290 basis points.

The repo rate is the rate at which the central bank lends money to commercial banks, and changes in this rate can affect the borrowing and lending rates in the economy. The MPC’s decision to keep the repo rate unchanged may be aimed at balancing inflation control and economic growth, which are both crucial for the Indian economy’s sustainable development.

There is a perception that the delay in the transmission of input costs may continue to keep the core inflation rate high. The Consumer Price Index (CPI), which is used to measure inflation, was at 6.44 percent in February, a slight decrease from 6.52 percent in the previous month.

Buzz

The MPC’s decision to adopt a data-dependent approach by pausing rate increases is pragmatic. The inflationary pressures in India are expected to persist due to factors such as geopolitics, oil, and agriculture. Credit growth in FY23 has not been robust and is on a lower base, while aggregate demand remains uncertain. The MPC’s decision was also influenced by the potential externalities of rate increases on financial stability, which have been observed in the West. Furthermore, the US Federal Reserve is likely to pause given emerging payroll data weakness and banking system risks. The 10-year yield differential between the US and India has also expanded, reducing concerns about funding outflows. Inflation is expected to soften due to the base effect and further moderation in commodity prices. We can anticipate a long pause on repo rates for at least three to four quarters, and the RBI will employ other monetary policy tools to manage any short-term challenges.

Advance Decline Ratio

Today, the advance-decline ratio was 2.00, and the market breadth was positive. The volatility index India Vix decreased by 4.95 percent to settle at 11.80 and the FIIs were net buyers today.

DAILY MARKET ACTION
Advancers – 1531
Decliners – 767
52Wk High –  57
52Wk Low – 15
High Band Hitters – 206
Low Band Hitters – 20
200d SMA – 17500
50d SMA – 17522
20d SMA – 17211

Top Gainers and Losers Stocks

The top gainers were Bajaj Finance (+3.29%), Adani Enterprises (+3.22%), Tata Motors (+2.49%), Bajaj Finserv (+2.04%), and IndusInd Bank (+1.57%).

The top losers were HCL Technologies (-1.63%), ONGC (-1.44%), ICICI Bank (-1.09%), Axis Bank (-1.07%), and Titan (-0.96%).

Top Gainers and Losers Sector

The top gainers sectors were Realty (+2.84%), Auto (+0.90%), Pharma (+0.76%), Oil & Gas (+0.65%), and Metal (+0.58%).

The top losers sectors were IT (-0.73%), FMCG (-0.54%), and Consumer Durables (-0.53%).

The Nifty Midcap 50 was up by 0.65 percent, while the Nifty Small Cap 50 was up by 0.81 percent on the day.

The Nifty Midcap 50 index currently closed at 8,550.65, while the Nifty Small Cap 50 index currently closed at 4,177.90.

SECTORS – NOTABLE ACTION
REALTY +2.84%
AUTO +0.90%
PHARMA +0.76%
IT -0.73%
FMCG -0.54%
CONSUMER DURABLES -0.53%

Stocks Ban List

The Securities and Exchange Board of India (SEBI) Futures and Options (F&O) ban list has not included any stocks on the ban list for today.

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.

Daily Pivots

As per the above pivots data, 17510 to 17670 is the Nifty 50 trading range.

Read previous -Daily Insights- here
Resilient Indian Market Despite Weak Global Peers
Crude Oil Prices Surge, but Inflation Concerns Dampen Sentiment
Indian Market: Nifty50 Gains Over 2% to End Three-Week Losing Streak

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