ALL EYES ON RBI

 

ALL EYES ON RBI

 

WORLD MARKETS

 

After starting with cuts of 0.8%-1.4%, US indices reversed these losses through the session to end with gains of 0.8%-1%.

 

US 10-year treasury yield fell 6 bps to 2.98%. Dollar index, after touching a high of 102.84, slipped to end 0.1% lower at 102.33. Spot gold rose 0.7% to $1,853.72 per ounce.

 

Brent crude futures added 0.9% to settle at $120.57 a barrel and WTI crude futures gained 0.8% to settle at $119.41, its highest settle since March 8.

 

European markets fell 0.1%-0.8%. Germany’s industrial orders fell by more than expected in April for a third consecutive monthly decline.

 

Earlier, the Reserve Bank of Australia announced a larger-than-expected interest rate hike of 50 bps.

 

The World Bank cut its global growth forecast for 2022 to 2.9% from 4.1% earlier and warned of the world economy slipping into a period of stagflation reminiscent of the 1970s.

 

AT HOME

 

Benchmark indices tumbled a percent, extending the losing streak to third straight day. Sensex settled at 55107, down 568 points while Nifty lost 153 points to finish at 16416. Nifty mid-cap and small-cap indices fell 0.7% and 0.6% respectively. BSE Consumer Durables and Realty indices were the top losers among the sectoral indices, down 2.7% and 1.6% respectively while Oil & Gas and Energy indices were the top gainers, up 1.2% and 1% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2294 cr, 2407 cr and 1566 cr respectively. DIIs were net buyers to the tune of Rs 1311 cr.

 

Rupee depreciated 8 paise to end at 77.71/$.

 

World Bank cut India's FY23 GDP growth forecast to 7.5% from 8.7% earlier.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of 0.6%-1.7% with Hang on the top. SGX Nifty is suggesting around 70 points higher start for our market.

 

In yesterday's report we had said that 16438, the low made last week, continued to be immediate support, upon breach of which, 20-DMA, placed around 16250, would be the next downside level to eye. We had also said that 16794, the top made last week, continued to be immediate hurdle.

 

Nifty broke 16438 support and fell all the way to 16347 before closing at 16416. The benchmark is set to open near 16500 today.

 

16610, the top made Monday, is the immediate hurdle on the hourly chart, above which, 16793, the top made last week, which also coincided with the upper band of daily bollinger band, would be the bigger hurdle to eye; 20-DMA, placed around 16250, continues to be immediate support.

 

35425, the top made Monday, is the immediate hurdle for Banknifty, above which, 36084 the top made last week, which also coincided with the upper band of daily bollinger band, would be the bigger hurdle to eye; 20-DMA, placed around 34650, is the immediate support.

 

RBI's Monetary Policy Committee will conclude its 3-day meeting today and is widely expected to hike repo rate by 25-50 bps, more closer to 50 bps. Markets will also closely watch out for inflation projections and tone of the policy for clues on quantum and pace of future tightening.