Daily Big Picture – RBI’s Monetary Policy Review Announcement Propels Benchmark Indices Higher


Today’s Action:

The benchmark indices recover sharply, from yesterday’s fall. Broader indices continue to rally.

Daily Market Review

Benchmark indices advanced higher in today’s session on the back of RBI’s interest rate announcement. After a good opening, investors remained cautious for most of the session awaiting the monetary policy outcome. However, post the announcement of unchanged interest rates, benchmark indices picked up momentum to end the day with good increments.

The Nifty opened at 9,663.95 points and traded in a range of 9,630.55 – 9,678.55. It gained 26.75 points or 0.28% and closed at 9,663.90 points in today’s trading session.

The Sensex gained 80.72 points or 0.26% after opening at 31,252.71. After trading in the range of 31,172.98- 31,346.99 it closed at 31,271.28 points.

The Sensex observed a lower trading volume, while the Nifty observed a high trading volume in today’s trading session.

The broader indices gained more than the frontline indices with the Nifty Midcap and Smallcap indices adding 0.69% and 0.40%, respectively, in today’s trading session.

The MarketSmith India IND 47 Index, which lists the top 47 stocks in chart and fundamental characteristics, gained 0.71% in today’s trading session, outperforming the benchmark.

Sectoral indices responded quite opposite compared to yesterday’s session. The Nifty IT index is the only sector composite that recorded losses in today’s session, while all the other sectors increased significantly. Top three gaining sectors of the day were the Nifty Pharma (1.37%), PSU Bank (1.24%), and Metal (0.98%) indices.

In a much awaited outcome of the RBI’s bi-monthly monetary policy review, the central bank retained repo rate at 6.25%, giving more room to access the impending impact of GST launch and the progress of the monsoon season. Further, the RBI cut Statutory Liquidity Ratio (SLR) by 50 basis points to 20%. It also projected the inflation rate to remain in a range of 2-3.5% for H1 FY 2018.

After yesterday’s subdued performance, benchmark indices recovered sharply, to inch back closer to its all-time high. The Equity markets continue to trade in a Confirmed Uptrend with a distribution count of 2.0 and 4.0 on the Nifty and the Sensex, respectively.

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