Daily Big Picture – Benchmark Indices Retract from Highs Ahead of RBI’s Decision

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Today’s Action:

The benchmark indices post significant losses amid anticipation of RBI’s policy meeting. Broader indices follow the key composites.

Daily Market Review

India’s major equity indices remained subdued for most of today’s session after a solid opening, as investors took a cautious stance ahead of RBI’s two day monetary policy review meeting.

The Nifty opened above 9,700 points and traded in a range of 9,630.20 – 9,709.30.  The index lost 37.95 points or 0.39% and closed at 9,637.15 points in today’s trading session.

Opening at 31,420.85, the Sensex lost 0.38%, to close at 31,190.56. The index traded in the range of 31,172.55-31,430.32.

The Sensex and the Nifty both observed a high trading volume in today’s trading session. High volume down day on both the indices resulted in a distribution day, today.

The broader indices declined more than the frontline indices with the Nifty Midcap and Smallcap indices losing 0.53% and 0.72%, respectively in today’s trading session.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, lost 0.88% in today’s trading session, outperforming the benchmark.

On the sectoral front all the indices ended in red except Nifty IT, which gained 2.32% today. The top three losing indices were Nifty FMCG, Realty, and Media giving away 1.41%, 1.37%, and 1.20%, respectively.

Negative breadth prevailed in markets as the country’s central bank is due to announce its decision on key interest rates tomorrow. Most likely, the RBI is expected to leave the interest rate unchanged post the two-day meeting. Given the current rate of inflation and recent Q4 GDP data, the chances of a rate cut look bleak.

Global markets tracked weakness from the ongoing tensions between Qatar and other Middle Eastern countries. The diplomatic ties between Qatar and the Gulf countries came under pressure as the countries claim that Qatar’s policies support extremism and terrorism. However, Qatar’s government denies the accusations and term this move as unjustified. As a result the countries cut-off transport links and relations with Qatar.

Despite a poor show in today’s session, the benchmark indices are comfortably placed, marginally below their all-time highs. The markets continue to remain in a Confirmed Uptrend with an updated distribution day count of 2.0 and 4.0 on the Nifty and the Sensex, respectively.

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