Gift Nifty at 24,525 signals a flat-to-negative opening for domestic markets on Thursday. After successive gains of four days, benchmarks may see some moderation ahead of the RBI policy meet outcome, said analysts. The return of foreign portfolio investors as buyers may limit the downside.
Nandish Shah, Senior Derivative & Technical Research Analyst, HDFC Securities, said: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has begun its three-day meeting on December 4, to decide on interest rates and its policy stance. RBI Governor Shaktikanta Das will announce the MPC’s policy decision on Friday, December 6.
According to analysts, the market may move in a range on Thursday
Suresh Darak, Founder, Bondbazaar, said: “In the last MPC meeting in October, RBI had held rates but changed its stance to “neutral” led by cooling of inflation at that point. The recent data points to higher inflation of 6.21% in Oct & lower GDP growth of 5.4% in Q2 puts RBI in a tricky position, acting as a dampener to hopes of a rate cut.”
While pressure would mount on the RBI to cut rates for boosting growth, the recent higher inflation along with the weakening of the INR against the dollar over the last couple of weeks would also play on the MPC’s mind, and may hold them back, he said, adding that the “benchmark 10 yr G-Sec though has gone down by ~10 bps since the GDP data, signalling that a section of the market believes that the RBI may just give in on the rate cut. It will be interesting to see RBI yet again doing the balancing act this week”.
According to Shah, “Short term trend of the Nifty remains positive. Bullish chart pattern like higher highs and lows is intact on the daily chart and any dips from here could be a buying opportunity. A decisive move above 24500 is likely to open the next upside of around 24900 in the near term. The immediate support is at 24300.”
Meanwhile, Asian stocks are ruling mixed with Japan shining, even as Hong Kong’s main index slipped over one per cent.