NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 09 FEB 2023

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Bulls took control of the markets as RBI's MPC meeting delivered a smaller rate hike in line with market expectations. RBI is more optimistic on domestic growth, raising GDP forecast while cautiously leaving FY24 CPI inflation at 5.3%. Meanwhile, global markets traded hopefully as investors digested Powell's speech, which explained that disinflation had begun but pointed to the possibility of further rate hikes in response to a stronger job market. The Reserve Bank of India (RBI) hiked the repo rate by 25 basis points, in line with our expectations. Despite this surge, a major concern for the RBI remains that core inflation is likely to remain persistent. This suggests that the RBI governor is cautious about taking inflationary risks. Furthermore, the US Federal Reserve's no-risk-on-inflation stance reinforces the RBI's resolve to be proactive. Therefore, we believe that in the next monetary policy, the RBI could make the decision to hike another rate to keep the Indian rupee stable. The Sensex closes 377 points higher at 60663. The Nifty closes 150 points higher at 17871.

With all major events behind us, the performance of global indices along with earnings will determine the future trend. This rally has certainly eased the pressure, but a crucial close above 17950 on Nifty is crucial for a sustained recovery. In the meantime, we reiterate our preference for IT, FMCG and select banks and automotive packaging and propose to focus on identifying opportunities in these sectors. Nifty appears to have made a brief higher bottom on February 7th. It may now face the resistance of the 17975-18050 band, while the 17650-17725 band might offer near-term support.

Resistance: 17900, 18000, 18100

Support: 17800, 17700, 17600