Benchmark indices gained for the sixth straight week having the best stretch of weekly gains in 3 years after RBI Monetary policy and raised GDP forecast. Nifty rose above 21000 for the first time ever. Sensex also touched life lifetime high. Nifty Bank hits record high, top contributors HDFC Bank, ICICI Bank & Axis Bank up more than 1%.
Noteworthy contributors to these gains included HDFC Bank, Infosys, and ICICI Bank.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the repo rate unchanged at 6.5 per cent and maintained the policy stance of ‘withdrawal of accommodation’ on Friday.
Furthermore, the RBI also revised its real GDP growth forecast for the fiscal year 2024 to 7%, up from the previous estimate of 6.5%. Despite this adjustment, the central bank maintained its inflation forecast, keeping the projection for Consumer Price Index (CPI)-based inflation, or retail inflation, at 5.4% for FY24.
“It is expected that the RBI’s decision would help in the growth of the economy. Increasing GDP forecasts will have a positive effect on the market. We expect that the rate pause will continue for some time,” Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd.
After the policy announcement, the Nifty 50 surpassed the 21,000 threshold for the first time, reaching an unprecedented peak of 21,006.10 in the session. Simultaneously, the Sensex achieved a new record high of 69,893.8 during the same trading period.
Another key driver was the resounding victory of the Bharatiya Janata Party (BJP) in the recent state elections, which boosted investor confidence in the stability and continuity of the government’s economic policies.
The Nifty 50 concluded at 20,969.40, marking a gain of 68 points or 0.33 percent. Simultaneously, the Sensex concluded the day at 69,825.60, exhibiting an increase of 304 points or 0.44 percent.
“Additionally, falling crude oil prices provided much-needed relief to the Indian economy, as lower oil import bills translate to lower inflation and a more favorable balance of payments. Similarly, a weakening US dollar index and lower US bond yields further bolstered investor sentiment by making Indian equities more attractive relative to their global counterparts,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Crude oil prices witnessed a more than 2% increase in the last trading session, propelled by favorable U.S. data reinforcing expectations of demand growth. Despite this positive development, both crude benchmarks recorded their seventh consecutive weekly decline, marking the longest stretch of weekly decreases in five years, primarily due to persistent concerns about oversupply.
Here’s what to expect from Nifty50 and Bank Nifty today —
Nifty50 breached the 21,000 mark for the first time in the previous session by hitting an all-time high of 21,006.10.
“In a bullish market scenario, the index appears poised to continue its upward trajectory, targeting 21,500 in the near term. Despite occasional consolidation, the momentum remains strong. Key obstacles are identified at the 21,000-21,100 level, with a crucial support base at 20,600,” Nanda said.
Bank Nifty Prediction
Nifty Bank settled with a gain of 0.90 percent while the Financial Services index closed 0.91 percent higher in its previous session on Friday.
“Both Nifty and Bank Nifty are currently experiencing strong bullish momentum and trading in uncharted territory. Bank Nifty is comfortably trading above the key resistance of 46300, with an immediate target zone of 47700-48000. Its potential lies in reaching the psychological level of 50000. An immediate demand zone exists at 47000-46800, with 46300 acting as a major support level,” Meena said.
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