Why the Indian stock market is rising following an RBI meeting

Stock market today: After a sluggish start to the morning session, the Indian stock market had a sudden upward movement following the release of the minutes from the RBI MPC meeting. India Inc. and supporters of Dalal Street were taken aback when the RBI Governor Shaktikanta Das maintained the repo rate at 6.50 percent. Key benchmark indexes Sensex, Nifty, and Bank Nifty hailed this RBI policy meeting conclusion and turned green within few minutes because the market was anticipating a 25 basis point rate hike.

BSE Sensex today experienced a remarkable rebound and increased to an intraday high of 59,914 levels after falling to an intraday low of 59,520. Following an intraday low of 17,502, the NSE Nifty rose to an intraday high of 17,617 levels today. The Nifty Bank index rose to a high of 41,259 during the day from a low of 40,820 levels.

Stock market experts said that the market was anticipating a 25 basis point rate increase from the RBI MPC meeting, but the central bank chose to promote growth rather than squeeze the market for funds to control inflation, which is still above its goal levels. They said that the RBI’s move will stimulate the banking and interest rate-sensitive industries, including as the automotive, durable goods, real estate, and infrastructure sectors.

Why did Nifty Bank act before the Sensex and Nifty?

Speaking on why the Indian stock market is rising following the RBI MPC meeting, Avinash Gorakshkar, Head of Research at Profitmart Securities, stated, “Market was expecting a 25 basis point rate hike from the RBI MPC meeting, but the central bank of India surprised both investors and observers by keeping interest rates unchanged.” Due to their ability to sustain their operations in the short term, this will help the economy flourish and have a favourable effect on the banking industry. Nifty Bank responded before the Sensex and Nifty because of this.

“The RBI was one of the few central banks to start raising interest rates when signs of rising inflation initially surfaced. This RBI strategy can therefore be seen as a sign that interest rates around the world are set to peak. This strategy gives us even more reason to celebrate at a time when the market is feeling upbeat, according to Santosh Meena, Head of Research at Swastika Investmart. The Swastika Investmart specialist continued by saying that in the immediate future, the market’s overall tone has shifted to one of optimism. Sell if you have the money, then buy later.

Technically, Nifty and Bank Nifty’s key resistance levels are 17600 and 41250, respectively. We should expect a surge towards the 17770 and 41650 levels if they are successful in crossing over these levels; otherwise, some profit-taking is predicted. The 17440 and 40650 levels provide as quick support on the downside. The selling point is the texture, according to Santosh Meena.

Stock picks for today

“The decision to maintain the repo rate unchanged is a positive sign for the banking and NBFC sectors, and it is expected to benefit other sectors such as real estate and infrastructure,” said Sonam Srivastava, Founder at Wright Research.

According to Avinash Gorakshkar of Profitmart Securities, the short-term rise is anticipated to be led by equities in the banking, auto, and consumer durable industries. In the PSU sector, he encouraged investors to purchase SBI and Canara Bank, while adding short-term Axis Bank and ICICI Bank shares. He recommended buying short-term Mahindra & Mahindra (M&M) stock in the automotive sector.

Disclaimer: Financeyogi.net provides financial information for educational purposes only. We do not offer personalized financial advice and are not responsible for any decisions made based on the information provided. Users should consult with a qualified financial advisor before making any financial decisions.
Ajith Kumar

Ajith Kumar

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