Closing Bell: Nifty ends a tad below 15,000 amid volatility after RBI keeps rate unchanged

Taking Stock | Winning Streak Continues For 5th Straight Day On Supportive RBI Policy; Nifty Crosses 15K Intraday

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Markets ended marginally higher in a volatile trading session, taking a breather after the recent surge. The benchmark indices started on a positive note, tracking supportive global cues however profit taking at higher levels capped upside. The MPC’s monetary policy review outcome was largely in line with the expectations thus failed to trigger any major reaction. On the sectoral indices, a mixed trend was witnessed wherein PSU banks, pharma and metal gained noticeable traction while auto and IT traded subdued. Amid all, the Nifty ended with gains of 0.2% at 14,924 levels.

Nifty tested another milestone of the “15,000” mark today. As the major events are behind us i.e. the Union budget and monetary policy meet, the focus will shift back to fundamentals as well as global cues. We might see some consolidation in the index early next week, so there’ll be no shortage of trading opportunities on the stock-specific front. Traders should align their positions accordingly and avoid contrarian trades.

The Nfity-50 & BSE Sensex Index gained more than 9% this week with Sensex breaking the 50,000 market and Nifty-50 close to the 15,000 mark. Market mood has been quite exuberant in the aftermath of the Union Budget along with stronger-than-expected earnings. Banks have further boosted risk on sentiment in the market. Globally earnings season is driving markets which are flirting near their all-time highs.

As expected the RBI kept its policy rates unchanged but kept its forward guidance of remaining accommodative to revive growth through liquidity support. Post budget banking sector has come to the forefront in driving up Nifty-50. This week the Nifty Bank Index is up nearly 16-17%. SBI alone is up a whopping 39% in one week followed by IndusInd Bank (up 21%) and Kotak Mahindra Bank (up 16%). More than 20 stocks gave higher than 10% returns this week. Nearly 47 stocks from Nifty-50 gave positive returns this week.

Budget has reignited the markets after the recent pre-event correction. The recent rally has been led by economy driven sectors along with banking. If we see the rally continuing next week also then market could go into overbought zone. We can expect some more future earnings upgrades as we go ahead into the result season. The 34 companies from Nfity-50 that have declared results so far have reported 34% jump in earnings on a yoy basis. This is way ahead of the 20% earnings growth we were forecasting to come from Nifty-50 in Q3FY21earnings season. A combination of positive sentiment, positive FII flows and very healthy earnings could keep markets at elevated levels in the near future.

Indian rupeeended with a gains of 4 paiseat 72.92per dollar, amid buying seen in the domestic equity market and RBI kept the key rates unchanged.

It opened flat at 72.98 per dollar versus Thursday's close of 72.96 and traded in the range of 72.79-72.99.

The markets have closed well in the green with supporting volumes. 15,000 has proved to be a psychological resistance but that should not deter the thought process on the trend. We continue to remain bullish and the Nifty has the wings to achieve 15,200. A buy on dips strategy would be advisable. There is ample scope for the markets to correct during intraday sessions. These dips can be utilised to make fresh long positions for higher targets. This way the risk reward trade off would be favourable.

: Benchmark indices ended higher on the fifth consecutive day in the volatile session on February 5 with Nifty above 14,900.

At close, the Sensex was up 117.34 points or 0.23% at 50,731.63, and the Nifty was up 28.60 points or 0.19% at 14,924.30. About 1281 shares have advanced, 1637 shares declined, and 146 shares are unchanged.

Reserve Bank of India (RBI) has kept repo rate unchanged at 4 percent and also kept Reverse Repo Rate unchanged at 3.35 percent and remain with the accomodative stance as long as required.

SBI, Tata Steel, Divis Labs, Kotak Mahindra Bank and Dr Reddy’s Labs were among major gainers on the Nifty, while losers were Axis Bank, Bharti Airtel, Tata Motors, ICICI Bank and UPL.

Among sectors, Nifty PSU Bank index gained 3.6 percent, while pharma index up 1 percent. However, selling seen in the auto, infra and IT stocks.

The market witnessed a lackluster movement after testing the resistance level around the Nifty 50 Index level of 15,000. While it is subject to further price action confirmation, A decisive breakout above the 15,000 levels would lead to a rally till the levels of 15,230-15,250. Expected 14,730-14,750 level to act as a support zone from the short-term perspective. The momentum indicators like RSI, MACD indicating the market's momentum to continue further.

It has been a very eventful week for the markets, first the Budget and then the RBI policy. There has been a lot of positives from the RBI policy on the economy, growth, CPI, liquidity, accommodative stance and repeated assurance on maintaining stability in markets. But, bond markets are disappointed as there was an expectation for some decisive action like a OMO calendar to take away the shock of the additional Rs 80,000 crore borrowing in the last two months of the fiscal.

From the day of the budgets to today, the 10 year G-Sec in a week has jumped 25 basis points from 5.90% to 6.15%. Having said that, I am confident that RBI will manage the large borrowing programme well and navigate the market efficiently like they did last year.

The company's consolidated net profit rose 52.3% at Rs 310 crore against Rs 203.4 crore and revenue was up 16.7% at Rs 1,771.3 crore versus Rs 1,518 crore.

Bajaj Electricals share price surged over 13 percent on February 5 after the company declared its Q3 results. The consumer electronics firm posted a 948 percent year-on-year (YoY) jump in the December quarter (Q3) consolidated net profit at Rs 98.2 crore. The company had posted a profit of Rs 9.37 crore in the year-ago period. For Q3, the income from operations stood at Rs 1,500 crore, a YoY rise of 16.8 percent.

For the quarter, Consumer Products (CP) segment saw a 34 percent YoY growth in revenue to Rs. 1,153 crore. The Earnings before Interest and Tax (EBIT) for this segment stood at Rs 142 crore, showing a 115 percent rise over the year-ago period.

RBI has maintained status quo on policy rates on expected lines. However, the commentary is quite dovish. RBI stated its monetary stance would continue to be accommodative. Also, it would ensure enough liquidity is available to support the high government borrowing program. Hence, the two cylinder of policy, fiscal and monetary, would be supportive to growth in economy. This is good news for banks and financials along with positive rub off to domestic cyclical sectors. We remain constructive on equity markets and believe that the economy and corporate earnings are at a cusp of a new multi-year upcycle.

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