Dear Trader…
Extending their losing streak for the fourth straight day, Indian equity benchmarks ended the Wednesday’s trade in red terrain with frontline gauges ending below their crucial 54,900 (Sensex) and 16,400 (Nifty) levels. Soon after making a flat-to-positive start markets entered into red terrain and extended losses as traders turned cautious with report that the World Bank cut India's economic growth forecast for the current fiscal to 7.5 per cent as rising inflation, supply chain disruptions and geopolitical tensions taper recovery. This is the second time that the World Bank has revised its GDP growth forecast for India in the current fiscal 2022-23 (April 2022 to March 2023). In April, it had trimmed the forecast from 8.7 per cent to 8 per cent.
However, markets wipe out all of their losses and turned green after Reserve Bank of India's (RBI) Monetary Policy Committee has raised Repo Rate by 50 basis points (bps) to 4.90 per cent in its June bi-monthly meeting. Real GDP growth for FY 2022-23 is retained at 7.2%. But, traders failed to hold gains and ended the day in red as market participants booked profit in later part of the day as India’s central bank said that it would withdraw pandemic-era monetary stimulus and hinted at further rate hikes, in the upcoming months.
Nifty futures opened at 16471.10 points against the previous close of 16429.25 and opened at a low of 16310.00 points. Nifty Future closed with an average movement of 238.00 points and a decline of around 74.25 points and 16355.00 points...!!
On the NSE, the midcap 100 index will decline 0.48% and smallcap 100 index is closing decline 0.30%. Speaking of various sectoral indices only FMCG, PVT Bank, Bank and Financial Services stocks were seen selling on the NSE, while all other sectoral indices closed higher.
At the start of intra-day trading, August gold opened at Rs.50900, fell from a high of Rs.51012 points to a low of Rs.50851 with a decline of 33 points, a trend of around Rs.50935 and July Silver opened at Rs.62120, fell from a high of Rs.62375 points to a low of Rs.61490, with a decline of 343 points, a trend of around Rs.61900.
Meanwhile, Reserve Bank of India (RBI) has increased the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points (bps) to 4.90 per cent with immediate effect. Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.65 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.15 per cent.
The RBI’s Monetary Policy Committee (MPC) also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
On the inflation front, inflation is now projected at 6.7 per cent in 2022-23, with Q1 at 7.5 per cent; Q2 at 7.4 per cent; Q3 at 6.2 per cent; and Q4 at 5.8 per cent, with risks evenly balanced, while the real GDP growth projection for 2022-23 is retained at 7.2 per cent, with Q1 at 16.2 per cent; Q2 at 6.2 per cent; Q3 at 4.1 per cent; and Q4 at 4.0 per cent, with risks broadly balanced.
Technically, the important key resistances are placed in Nifty future are at 16404 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 16474 – 16606 levels. Immediate support is placed at 16303 – 16232 levels.
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