Markets added to the gains on Wednesday, thanks to a lower and expected rate hike from the Reserve Bank of India, as well as favorable global signals and a continued rebound in Adani shares. Nifty finished with gains of 0.85% on Wednesday while Sensex gained 0.63%.
Markets added to the gains on Wednesday, thanks to a lower and expected rate hike from the Reserve Bank of India, as well as favorable global signals and a continued rebound in Adani shares. Nifty finished with gains of 0.85% on Wednesday while Sensex gained 0.63%.
Adani Enterprises and Adani Ports led the gains, rising 13.13% and 9.01% respectively at the Nifty, while other group stocks such as Adani Transmission, Adani Power and Adani Wilmar gained as much as 5 %. Ambuja Cements, ACC and NDTV added to their gains, with only Adani Total and Adani Green down 5%.
Adani Enterprises and Adani Ports led the gains, rising 13.13% and 9.01% respectively at the Nifty, while other group stocks such as Adani Transmission, Adani Power and Adani Wilmar gained as much as 5 %. Ambuja Cements, ACC and NDTV added to their gains, with only Adani Total and Adani Green down 5%.
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Dhiraj Relli, MD and CEO, HDFC Securities, said: “Both bond and equity markets reacted well to the Monetary Policy Committee (MPC) outcome as the MPC did not appear more hawkish than most expected. . The lack of a CRR hike was also a relief.”
Experts said the RBI took a more bullish view on domestic growth by raising the GDP forecast while cautiously keeping CPI inflation at 5.3% for FY24.
Meanwhile, global markets traded hopefully as investors digested a speech by US Fed Chairman Jerome Powell, who said disinflation had begun but signaled the possibility of further rate hikes in response to a dovish market. work harder, said Vinod Nair, head of research at Geojit Financial. Services.
With no negative surprises from the RBI’s MPC meeting, investor buying continued in IT, banking and others.
Easing recession fears after Powell’s comments on disinflation also led to improved sentiment for IT services. Share prices in other rate-sensitive sectors, including autos, consumer durables and real estate, also reacted well to the MPC results. Strong signals from the US market in overnight trading also boosted market sentiment.
Sandeep Yadav, Head of Fixed Income, DSP Mutual Fund, said: “RBI was expected to either soften its stance or appear data dependent. But the governor’s statement did not prompt such thoughts, due to which g-sec yields edged up 3 basis points to 7.33%.”
Lakshmi Iyer, CEO – Investment Advisor, Kotak Investment Advisors Ltd, said while the odds of a break remain, uncertainty may linger and she expects range-bound yield movement until then – oscillating between global data and national signals.
The Rupee after the policy announcement closed 20 paise stronger at ₹82.49 to the dollar, which analysts attribute to dollar inflows.
With the repo rate pegged at 6.5%, the 10-year IGB benchmark yield is expected to trade in a range of 7.25-7.5% over the medium term according to mutual fund Edelweiss. The fund house expects the sovereign yield curve to steepen in FY24 amid long-term demand-supply momentum. Credit spreads are also expected to gradually widen in FY24 amid continued growth in credit drawdowns and unfavorable liquidity conditions in global markets for fundraising.
Anindya Banerjee, Vice President – Currency and Interest Rate Derivatives at Kotak Securities Ltd, said RBI’s monetary policy was in line with expectations, with the central bank raising rates by 25 basis points and maintaining the status quo on the position. In the short term, we could see the USDINR moving in a range of 82.40 and 83.00 in place. »
However, there was no respite in the sell-off from foreign portfolio investors. REITs that have already sold ₹32,333 crore of equity year-to-date through Feb 7 were net sellers of ₹736.82 Crore equity on Wednesday.
The uninterrupted sale of FII remains the biggest drag on the market today. In this context, traders will also use rallies to sell analysts.
Intra-day volatility could continue due to uncertainty in global markets and fears that central banks in major economies will maintain a hawkish stance going forward, which could trigger strong sideways movements, experts said. .
“Nifty appears to have bottomed higher on Feb 07 in the near term. It may now face resistance at the 17972-18016 band while the 17652-17721 band may offer near term support,” Deepak Jasani said. , head of retail research at HDFC Securities.
Against this backdrop, what investors should do now is buy high-quality stocks in growth segments like banking, IT, capital goods, telecoms and cement and invest upward across all sectors, analysts said. Patient investing now will yield impressive returns in the medium to long term.
