Sensex, Nifty end in red on GDP growth forecast cut by RBI; check how to trade next week

BSE Sensex and Nifty 50 erased all the morning gains after the RBI announced to keep the repo rate unchanged on Friday. BSE Sensex ended 132 points down at 52,100, while the Nifty 50 index ended 20 points down at 15,670. During intraday, Sensex hit a day’s high of 52,389.02, while Nifty 50 surged to a fresh record high of 15,733.60. Broader markets outperformed the equity markets. BSE Midcap index finished at 22,511.49 and Smallcap index at 24,262. Both the indices hit a fresh 52-week high during intraday deals. India VIX, volatility index, was up 1.23 per cent and ended at 15.94 levels. RBI’s monetary policy committee (MPC) revised down the growth projection to 9.5 per cent from 10.5 per cent for the current financial year and revised the inflation projection upward to 5.1 per cent.

Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities 

Equity markets in India continued their upward march amid improving situations relating to the second Covid wave and expectation of gradual ease down in lockdown restrictions. This week saw both Sensex and Nifty making a record closing high .On 3rd June, Nifty 50 and Sensex hit a fresh record closing high of 15,690 and 52,232, respectively. Midcap and Smallcap indices also moved in upward direction this week. The Nifty-50 gained 1.4%, Nifty MidCap 100 Index gained 3.2% and the Nifty Small Cap 100 Index gained 2.5% during the week. FPIs have been net buyers in Indian equities in June 2021. During June’21 to date, they have brought to the tune of Rs 1,550 crore as markets started pricing in normalization of business conditions amid gradual dilution of restrictions on activities by various state governments, as daily new Covid-19 cases continue to remain low. After moving below 1.58% last week, the yield on the benchmark 10-Year Treasury note rose to 1.63%. Expectation of normal monsoon, accommodative stance by RBI, decline in fresh Covid cases in India, gradual easing of lockdown restriction and positive global cues would likely lend support to the market in the near term.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The index has closed a few points below 15700 but the trend still remains positive and we should head to 15900-16000. The Nifty has multiple supports at 15600, 15400 and 15300. The most crucial of these is the 15300 level which needs to be respected on a closing basis. Intra day dips should be utilized to accumulate buy positions on the index for higher targets.

Binod Modi, Head Strategy, Reliance Securities

Benchmark Nifty corrected marginally led by contraction in financials, especially in banks. Further, weak global cues also weighed on sentiments. Notably, a moderate increase in inflation forecast by the RBI in its policy meeting outcome today led G-sec yields increasing by ~3bps, which resulted in profit booking in banks. Notably, Nifty recorded weekly gain of 1.5% and added Rs 6 trillion in investors’ wealthy during the week. MPC meeting outcome today was mostly in-line with expectations as RBI, in addition to maintaining status quo about policy rates, focused upon ensuring sufficient liquidity in the system and supported MSMEs and corporate hit in second wave. Investors will continue to focus on trajectory of daily caseload and vaccination ramp up in the country in the near term. While domestic equites continue to look good, investors must focus on quality stocks with robust earnings visibility and margins of safety. In our view, sectors considered to be major beneficiaries of capex revival are likely to be back in focus in coming weeks.

Mohit Nigam, Head PMS, Hem Securities

Nifty 50 closed at 15,670.25 after a volatile trade session and decent recovery in later hours. Banks were hit the most post RBI’s meeting outcome while auto, metals and energy were slightly higher. Broader markets continue to gain momentum & outperform benchmarks. Housing finance counters were on a run post yesterday’s surge on announcement of new rental law while on the other hand entertainment stocks also witnessed some respite post RBI’s meeting outcome. After witnessing late intra-day recovery from losses, Nifty looks to maintain its momentum in upward direction and higher levels to look out shall be 15,800 and 16,000. Key support levels for the near term remain at 15,500 and 15,300.

Nirali Shah, Head of Equity Research, Samco Securities

The fourth quarter result season pace has been relatively slower this fiscal wherein relatively fewer companies from several sectors have announced their earnings till now. The coming weeks could see a number of PSU heavyweights including SAIL, NTPC, Coal India etc. in focus as they come out with their numbers. Further, key developments on the disinvestment story could also keep the PSU stocks on radar. Investors should therefore place trades cautiously on PSUs to buffer from any unforeseen shocks owing to such announcements. Meanwhile, Indian markets could continue to mimic the movement across global commodities and equities.