Bears continued to rule on dalal street. The Sensex fell over 200 points
and the Nifty dropped below the 11,000-level in early trade Wednesday after the
rupee dropped to a new low amid sustained foreign fund outflows and surging
crude oil prices. BSE benchmark Sensex closed at 35975,
down 550 points. The Nifty ended 150 points lower at 10800. Investors were also cautious ahead of the three-day RBI
policy review started from today. Investors will keep a close watch on the
Reserve Bank of India's (RBI) decision on key interest rates. The RBI's
monetary policy committee has started its three-day meeting from today to
decide on the fourth bi-monthly monetary policy. After two successive hikes,
the repo-rate currently stands at 6.50%. In this running week, which is a
truncated one as Tuesday was a market holiday for Gandhi Jayanti, RBI’s money
policy review will be one of the key market drivers along with some
macroeconomic numbers and movement in the rupee and crude oil prices. The
central bank’s fourth bimonthly money policy review of this financial year will
be held on October 3-5. Market analysts believe RBI may feel compelled to go
for a rate hike for the third time, considering the rupee’s poor health, steady
rise in crude oil prices and Fed’s third rate hike. In its August policy, RBI
had raised the repo rate for the second consecutive time by 25 basis points
to 6.50%.
All eyes are on RBI meet that is held on Wednesday and expect some skepticism if the rates are hiked. Nifty has reached closer to the immediate and crucial hurdle of 10850, and a decisive breakout will trigger fresh surge ahead. We suggest maintaining cautiou approach in the nifty future, considering the mixed sentiment. Traders should focus more on the money management aspects and avoid taking unnecessary risk. The 11000 and 11100 levels may act as immediate resistance levels for Nifty, while supports may come in at 10800 and 10750 levels.
All eyes are on RBI meet that is held on Wednesday and expect some skepticism if the rates are hiked. Nifty has reached closer to the immediate and crucial hurdle of 10850, and a decisive breakout will trigger fresh surge ahead. We suggest maintaining cautiou approach in the nifty future, considering the mixed sentiment. Traders should focus more on the money management aspects and avoid taking unnecessary risk. The 11000 and 11100 levels may act as immediate resistance levels for Nifty, while supports may come in at 10800 and 10750 levels.
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Resistance: 11000, 11100
Support: 10900, 10800
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