Dear Trader…
Indian equity benchmarks staged a strong up move for second straight session on Wednesday after the Reserve Bank of India (RBI), as widely expected, held interest rates steady at all-time low and maintained its accommodative stance for as long as necessary to support growth. The benchmark indices started firm, as traders took encouragement with global rating agency S&P’s statement that the impact of the new coronavirus variant on India's economic outlook would be contained. It expects India's economy to grow 9.5% in FY22 and 7.8% in FY23.
Key indices extended gains to the day's high level in second half of the trading session, taking support from the Reserve Bank of India’s statement that retail inflation is likely to ease to around 5 per cent next fiscal on the back of government measures to ease supplies, reduction in fuel prices as well as prospects of good crops. For the current fiscal year to be ending on March 31, 2022, retail inflation is expected to be around 5.3 per cent.
Nifty futures opened at 17343.00 points against the previous close of 17225.40 and opened at a low of 17327.00 points. Nifty Future closed with an average movement of 200.45 points and a rise of around 286.10 points and 17511.50 points...!!
On the NSE, the midcap 100 index will rise 1.61% and smallcap 100 index is closing rise 1.83%. Speaking of various sectoral indices, the NSE saw heavy gains in PSU Bank, Media and Auto stocks, while all other sectoral indices also closed higher.
At the start of intra-day trading, February gold opened at Rs.48150, fell from a high of Rs.48300 points to a low of Rs.48087 with a rise of 42 points, a trend of around Rs.48102 and March Silver opened at Rs.61754, fell from a high of Rs.61965 points to a low of Rs.61506, with a decline of 250 points, a trend of around Rs.61578.
Meanwhile, ICRA Ratings in its latest report stated that the cost of debt-funds for the states jumped again as the weighted average cost of borrowings rose by 37 bps to a one-month high of 6.80 per cent in the auction on December 07, 2021, compared to the last week, after falling marginally for two weeks.
According to an analysis by ICRA Ratings, at the weekly auction of state development loans, six states raised just Rs 8,000 crore, which is 41 per cent lower than the indicated Rs13,600 crore, which is the sixth consecutive week of lower-than-indicated issuance.
Aditi Nayar, the chief economist at the rating agency, said the spread between the 10-year state debt and the G-secs eased to a 24 month-low of 45 bps from 51 bps last week, while the weighted average cost of their borrowings jumped by 37 bps to 6.80 per cent over the past week. She said seven of the 13 states that initially indicated their participation in the auction did not raise funds, even as Telangana borrowed Rs 500 crore more than indicated.
Technically, the important key resistances are placed in Nifty future are at 17547 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 17588 – 17606 levels. Immediate support is placed at 17434 – 17373 levels.
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