A day
after Budget 2016, Bulls took charge on Dalal Street today both the indices
shot up over 3 percent each. The Sensex shot up 800 points to 23700 while the
Nifty reclaimed the 7200-mark, up over 200 points. The Indian stock
market rallied on the back of firm global markets. Finally Sensex ended with
a gain of 777 points at 23779. The Sensex opened at 23153 touched an intra-day
high of 23821 and low of 23133. The Nifty closed with a gain of 235
points at 7222. This is the biggest single day gain in 7 years for Sensex and
Nifty in absolute terms. The Nifty opened at 7038 hitting a high of
7236 and low of 7035. As the Union Budget 2016 seeps in,
benchmark indices surged ahead with Nifty50 reclaiming 7,200 mark as clamours
for an out-of-turn rate-cut in repo rate by the Reserve Bank of India (RBI)
grew louder.
The headline indices gained as Finance Minister Arun
Jaitley's commitment to walk on the fiscal consolidation path fuelled
expectations RBI governor may go for an interest rate hike sooner than later.Markets
staged a strong rally on hopes that Reserve Bank Governor Raghuram Rajan will
announce an out-of-turn reduction in repo rate after Monday's Budget. Dr Rajan
had last cut interest rate in September. The necessary condition for a
rate cut has been met with fiscal deficit target retained at 3.5 per
cent.That is increasing expectations of an inter-meeting rate cut in the
market. Sticking to the fiscal deficit target for the moment as compared
to expectations of missing the target is a big positive. We expect RBI to cut
rates by further 50 basis points by mid-June. On the
upside, 7250 through 7280 would be the first supply zone to watch out for—once
this range is taken out we can expect another dash at the 7300 or higher
levels. Further up, resistance is likely to be felt between 7350 and 7380. On
the other hand, if it were to go down below 7135 and sustain there it is likely
to get good support between 7025 and 7000.
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Resistance: 7250, 7300, 7350
Support: 7200, 7150, 7100
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