Indian markets failed to hold on to the gains made early in the day and closed in the red on June 4 after the Reserve Bank of India’s monetary policy committee (MPC) held key rates steady.
The central bank, however, lowered its 2021-22 estimate for the economic growth to 9.5 percent from 10.5 percent due to the impact of the second COVID-19 wave.
At close, the Sensex was 132 points lower at 52,100. The Nifty, which hit a record high of 15,733 during the day, ended 20 points lower at 15,670.
“The market had opened with mild positivity but pared the gains post announcement of RBI monetary policy. Factoring the impact of second wave, RBI reduced the FY22 GDP forecast from 10.5 percent to 9.5 percent and trimmed the inflation forecast from 5.2 percent to 5.1 percent,” Vinod Nair, Head of Research at Geojit Financial Services said.
“As expected, RBI kept its policy rates unchanged and reiterated its accommodative stance. G-Sec buying and liquidity support to MSMEs and affected sectors will help to overcome the pandemic hit the economy,” he added.
Also Read: RBI Monetary Policy: CPI inflation projection rate at 5.1 percent for 2021-22
Sectorally, rally was seen in industrial, oil & gas, capital goods, utilities, while profit-taking was seen in banks, consumer durable, FMCG, and energy space.
Broader markets outperformed the benchmark indices. The BSE midcap index rose 0.6 percent, and the smallcap index closed with gains of 0.78 percent.
Here’s what experts think that investors should do on June 7:
Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited
The Nifty50 formed a small Bearish candle on the daily scale and a Bullish candle with higher highs on the weekly chart. It continues its higher highs–higher lows formation of the last four weeks.
The index has to hold above 15,600 to witness an upmove towards a fresh lifetime high of 15,800 and 16,000, while on the downside, support exists at 15,550 and 15,431.
Also read: RBI Governor Shaktikanta Das announces G-SAP 2.0 of Rs 1.2 lakh crore in Q2 FY22, additional purchase under current round
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The index closed a few points below 15,700 but the trend remains positive and it should head to 15,900-16,000. The Nifty has multiple supports at 15,600, 15,400, and 15,300.
The most crucial of these is 15,300, which needs to be respected on a closing basis. Intraday dips should be utilised to accumulate buy positions on the index for higher targets.
Rohit Singre, Senior Technical Analyst, LKP Securities
The index closed the week at 15,670 with gains of 1.5 percent and formed a bullish candle on the weekly chart for the third consecutive week that shows good strength.
Going forward, 15,600-15,500 will act as good support, and any dip near the level will again be a buying opportunity for an immediate bounce towards 15,800.
Any decisive close above 15,800 can push the index towards 16,000, where short-term traders can think of profit booking.
Also read: RBI Monetary Policy: Key highlights of Governor Shaktikanta Das’ speech today
Ashis Biswas, Head, Technical Research, CapitalVia Global Research Limited
The Nifty failed to hold on to 15,700. While it is subject to further price action evolution, the technical factors are aligned to support a lacklustre market movement.
Any corrective wave down should find support around 15,300-15,350. Traders are advised to refrain from building a fresh buying position until the market witnesses a correction till 15,300-15,350.
Volatility was observed during the day, indicating profit booking and distribution of stocks at a higher market level.
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