The pace of fall is slightly worrisome. Nifty appears to have triggered short term trend reversal which will be confirmed on a close below 11,829 levels.
Sensex, Nifty log biggest one-day loss of the year 2019. The RBI slashed repo rates by 25 bps to 5.75% and changed the stance to accomodative from neutral.
The RBI rate cut is expected to bring down bursen of EMIs on home and auto loans, and reduce the debt repayment burden on corporates, suggest experts. However, depositors would earn less on their bank investments.
A downward revision of FY20 GDP growth forecast and no major measure to address liquidity conditions for NBFCs dented sentiment, suggest experts.
The market is facing a crisis of confidence with respect to the precariously perched NBFC (including HFCs) and fixed-income mutual fund sectors, they say.
Rate-sensitive stocks that were hitting record highs in the run-up to the MPC meet witnessed a big sell-off in intraday trade.
The Indian rupee recouped most of its early losses and closed marginally lower at 69.28 to the US dollar after the Reserve Bank in a widely expected move cut key interest rates by 0.25 percentage point.
On the institutional front, FPIs were net sellers in Indian markets for Rs 1448 crore while DIIs were bet sellers to the tune of Rs 650 crore, provisional data showed.
Big News:
The Reserve Bank of India (RBI) on expected lines slashes key rates by 25 bps on Thursday and changed its outlook to Accommodative from Neutral earlier. This was the third consecutive time that RBI has cut rates by 25bps amid worsening macro conditions.
But, how far will RBI go in cutting rates to support the economy and infuse liquidity in the banking system as a time when the transmission of rates has been slow.
Transmission of the cumulative reduction of 50 bps in the policy repo rate in February and April 2019 was 21 bps to the weighted average lending rate (WALR) on fresh rupee loans, said a Kotak Institutional Equities report.
Most experts feel that the RBI could further cut rates by 25 bps to 75 bps in the next 12 months.
Technical View:
Nifty forms Bearish Belt Hold pattern; experts advise to create short positions
The pace of fall is slightly worrisome. Nifty appears to have triggered short term trend reversal which will be confirmed on a close below 11,829 levels
A break below this level could take the index towards 11600 levels. Upside likely to remain capped to 12103
Three levels: 11830, 12039, 12103
Max Call OI: 12500, 12000
Max Put OI: 11500, 11000
Stocks in news:
The National Consumer Disputes Redressal Commission has asked real estate giant Unitech to refund over Rs 53 lakh to two home buyers for failing to hand over the possession of an apartment.
Infrastructure major Larsen and Toubro on Thursday acquired 25,000 equity shares of Mindtree Ltd, taking its total holding to 28.9%, as per a regulatory filing.
Business tycoon Azim Premji is set to retire as the Executive Chairman and Managing Director of Wipro, India’s fourth-largest IT company, on July 31.
Technical Recommendations:
We spoke to IIFL and here’s what they have to recommend:
Hindustan Unilever: Buy| Target: Rs 1939| Stop Loss: Rs 1791| Upside 5%
Wockhardt June Futs: Sell| Target: Rs 364| Stop Loss: Rs 398| Downside 6%
Shriram Transport Finance June Futs: Sell| Target: Rs 1007| Stop Loss: Rs 1103| Downside 6%
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