BSE Sensex and Nifty 50 tanked 1.4 per cent each on Tuesday, one day ahead of Reserve Bank of India’s (RBI) Monetary Policy Committee decision on June 8. So far in the day BSE Sensex has fallen to a day’s low of 54,882.41, while Nifty 50 hit 16,375.15. Analysts say that weakness in global markets on inflationary concerns, tightening interest rates ahead of the RBI Policy outcome, appears to be weighing on the domestic investors. “Technically too, markets are currently selling on rallies, with the key range seen between 16700-15700 range. Interest rate sensitive stocks could witness pressure in days ahead, so it has to be stock specific picking, with a long-term perspective,” Aamar Deo Singh, Head Advisory, Angel One, told FinancialExpress.com.
On S&P BSE Sensex, 26 out of 30 stocks were ruling in the red. Only NTPC, Reliance Industries Ltd (RIL), Maruti Suzuki India, and Power Grid Corporation of India were in green. Markets are extremely tentative ahead of the MPC outcome; the reasons remain both fundamental and technical, Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services, told FinancialExpress.com. He added that aggravated inflation worries, an impending one more hike sooner or later, and a potential return of Covid in some parts of the country are playing spoilsport with the markets. These reasons remain fundamental in nature.
“If the Nifty is able to keep its head above 16400, there are still open and wide chances of the markets resuming their up move. A slip below 16400 will push the markets in a broad trading range of 16400-15700,” Vaishnav added.
Ravi Singh, VP & Head of Research, Share India Securities, said BSE Sensex and Nifty were falling in anticipation of rate hike by RBI amid fear of uncontrollable inflation. Singh told FinancialExpress.com that RBI is already taking several measures for fiscal tightening and tampering liquidity from the markets. Traders are nervous about the possibility of a more hawkish stance this time. “Nifty may touch the levels of 16250 ahead of RBI policy outcome,” he added.
Impending RBI interest rate hikes coupled with continuing unrest in Ukraine have led to sustained selling pressure in all major indices, AR Ramachandran, Co-founder & Trainer, Tips2Trades, said. Ramachandran told FinancialExpress.com that technically, if Nifty closes below 16400 today, levels of 16270 and 16115 are possible in the coming days. 55390 remains a massive resistance for Sensex in the coming days.
The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.