In the wake of the recent US Fed developments and the unveiling of the Interim Budget, the spotlight now turns to the Reserve Bank of India’s (RBI) policy meeting in the upcoming week. Analysts predict that the central bank is likely to maintain the status quo in its policy decisions, marking a period of stability in the financial landscape.
Market Expectations and Sentiments:
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, shares insights, stating, “We expect the central bank to maintain its status quo.” He emphasizes that, with the major events like the US Fed updates and the Interim Budget behind, the RBI’s policy decisions become the primary focus for domestic markets. Despite potential global factors, Khemka believes the market will likely stay positive, buoyed by favorable sentiments stemming from the commendable delivery on the budget.
Friday’s Market Performance:
On the most recent trading day, the Nifty demonstrated resilience, closing with gains of 156 points (+0.7%) at 21,854 levels. Noteworthy was the majority of sectors closing in the green, with notable buying activity in Oil & Gas, Metals, PSU Bank, and IT sectors.
Oil marketing stocks experienced a 3% gain, attributed to the fall in Brent crude to a nearly 1-month low at $78/bbl amid a ceasefire in the Middle East. Tech stocks observed renewed interest due to bargain hunting following strong quarterly results from industry giants Meta and Amazon. The PSU bank sector surged over 2%, prompted by the 10-Year G-Sec Yield hitting an 8-month low at 7.04% after the Finance Minister disclosed a reduced borrowing plan.
Technical Analysis Perspective:
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, notes that the short-term uptrend status of Nifty remains intact. However, the overall chart pattern suggests the possibility of heightened volatility at new highs. He indicates that any attempt at an upmove could encounter strong resistance around 22,100 – 22,200 levels, potentially resulting in short-term weakness from the highs. The immediate support level is identified at 21,700.
As the markets gear up for the RBI policy meeting, investors are poised for potential developments that could shape the trajectory of financial indicators in the immediate future.
