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Indian indices on Wednesday closed lower, extending run of losses, dragged by heavy selling pressure in market heavyweights Reliance Industries, Bharti Airtel, and ITC as RBI's monetary policy committee decided to increase repo rate by 50 bps to 4.9%. The Sensex fell 214 points to close at 54892, while Nifty declined 60 points to end at 16356. After today’s 50 basis points hike in the repo rate, the Reserve Bank of India still has 75 bps to go. The RBI has raised its inflation forecast by a massive 100 bps, which shows that the central bank has anticipated every possible adverse effect. While the cash reserve ratio was untouched, it is still on the table to be used. In February policy, the RBI could take a pause to assess if the government’s fiscal position is changing. The new fiscal year budget would be out and the fiscal position for FY23 would be known. The RBI would want to assess how the government’s fiscal position for the next year would be. It could resume its rate hiking cycle in April. Technically, the pattern signals a weak trend with range bound action. Nifty is currently placed at the edge of breaking below the crucial support of 16,300 levels (support as per change in polarity and daily 10 and 20 day EMA). But minor buying is still emerging from the lows.
Resistance: 16450, 16625, 16800
Support: 16300,
16150, 16000
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