After a flat open and rangebound trade for the most part of the day, the Nifty50 closed mildly lower Wednesday. This was after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 6.5 percent while keeping the policy stance neutral.
The fall in the market is on account of mild profit booking after rising 400-points in the previous four consecutive sessions. The index formed 'Spinning Top' kind of pattern on the daily candlestick charts.
Overall it was a volatile session for the market. The Nifty50 after flat opening at 11,359.80 traded higher and hit fresh intraday record high of 11,390.55, but the rally gradually fizzled out in late morning deals amid rangebound trade and hit an intraday low of 11,313.55 after the RBI monetary policy announcement. The index closed 10.30 points lower at 11,346.20.
According to Pivot charts, the key support level is placed at 11,309.63, followed by 11,273.07. If the index starts moving upwards, key resistance levels to watch out are 11,386.63 and 11,427.07.
The Nifty Bank index closed at 27,596.60, down 167.55 points on Wednesday. The important Pivot level, which will act as crucial support for the index, is placed at 27,442.94, followed by 27,289.27. On the upside, key resistance levels are placed at 27,785.24, followed by 27,973.87.
Stay tuned to Moneycontrol to find out what happens in currency and equity markets today. We have collated a list of important headlines from across news agencies.
S&P, Dow edge down after Fed decision; tech boosts Nasdaq
The S&P 500 and Dow slipped on Wednesday as gains in Apple shares were offset by a drop in energy and industrial companies, while the US Federal Reserve remained on course for an expected interest rate hike in September.
The Dow Jones Industrial Average fell 81.37 points, or 0.32 percent, to 25,333.82, the S&P 500 lost 2.93 points, or 0.10 percent, to 2,813.36 and the Nasdaq Composite added 35.50 points, or 0.46 percent, to 7,707.29.
Asian shares face headwinds from fresh trade worries
Asian stocks were little changed on Thursday, with sentiment fragile after the latest escalation in Sino-US trade war while global bond markets were rattled by Washington’s increased borrowing and Japan’s new tolerance for higher yields.
MSCI's broadest index of Asia-Pacific shares outside Japan was off less than 0.1 percent in early trade while Japan's Nikkei was flat.
SGX Nifty
Trends on SGX Nifty indicate a flat to positive opening for the broader index in India, a rise of 3.5 points or 0.03 percent. Nifty futures were trading around 11,362-level on the Singaporean Exchange.
Fed leaves rates unchanged, stays on course for Sept hike
The US Federal Reserve kept interest rates unchanged on Wednesday but characterized the economy as strong, keeping the central bank on track to increase borrowing costs in September.
The Fed said economic growth has been rising strongly and the job market has continued to strengthen while inflation has remained near the central bank’s 2 percent target since its last policy meeting in June, when it raised rates.
RBI to further strengthen office of Internal Ombudsman (IO) of banks
RBI has decided to strengthen grievance redressal mechanism of banks by giving more autonomy to Internal Ombudsman (IO), appointed by banks to resolve customer complaints. "Revised instructions in this regard will be issued by the end of September 2018," RBI said in a its statement on developmental and regulatory policies.
With a view to strengthening the internal grievance redressal mechanism at banks, select banks were advised in May 2015 to appoint IO as the apex authority for redressal of customer complaints, it said.
10-year yield at two-month high as US steps up borrowing
The benchmark 10-year US Treasury note’s yield reached its highest in 2-1/2 months on Wednesday, breaking above 3 percent after the government said it intended to boost borrowing in the bond market in the coming quarter to fund spending and debt obligations.
The release of Treasury’s quarterly refunding report furthered those gains, pushing the 10-year note yield to a session high of 3.016 percent, the first time it has risen above 3 percent since June 13. Yields across maturities rose to session highs as prices fell on expectations that supply growth would outpace demand while the Fed raises US interest rates.
Oil falls 2% on rising supply, concern about trade tensions
Oil prices fell about 2 percent on Wednesday as a surprise increase in US crude stockpiles fed concerns about global oversupply, while investors worried that trade tensions could hit energy demand.
Brent crude futures fell USD 1.82 to settle at USD 72.39 a barrel, a 2.5 percent loss. US West Texas Intermediate (WTI) crude futures fell USD 1.10 to settle at USD 67.66 a barrel, a 1.6 percent loss.
BSE Investments acquires 24% stake in CDSL Commodity Repository
BSE yesterday said its subsidiary BSE Investments has acquired 24 percent stake in CDSL Commodity Repository Limited (CCRL), a move aimed at developing a robust framework for clearing and settlement of commodity trades. As per the rules, BSE cannot take direct stake in any unrelated business and hence the stake is being taken through its subsidiary.
Besides, CCRL will enable electronic accounting of commodities, thereby ensuring ease of use, accuracy and lower costs for document transmission. The commodity repository will also provide the legal and regulatory environment for inventory financing and warehouse receipt lending.
RBI to unveil norms on co-origination of loans
The Reserve Bank of India (RBI) on Wednesday said it will soon release guidelines on what it called co-origination of loans by banks and non-bank finance companies (NBFCs) for the priority sector. Bankers said the move could help banks meet priority sector lending targets in a more convenient and organized manner, leveraging the reach of NBFCs.
“To provide the much-needed competitive edge for credit to the priority sector, it has been decided that all scheduled commercial banks (excluding regional rural banks and small finance banks) may co-originate loans with non-banking financial companies - non-deposit taking- systemically important (NBFC-ND-SIs), for the creation of eligible priority sector assets,” RBI said in a statement. The guidelines will issued by end of September 2018, Mint reported.
Monsoon seen missing forecast of normal rain this year
India’s monsoon, which irrigates more than half of the country’s farmland, is likely to be below an earlier forecast of normal showers, Skymet Weather Services Pvt. said.
Precipitation during the June-September rainy season is forecast to be 92% of the long-term average of about 89 centimetres (35 inches), compared with a prediction of 100 percent made in April, the New Delhi-based private forecaster said on its website. The forecast has a margin of error of 5 percent, it said, Mint reported.
74 companies to report June quarter numbers today
On the earnings front, as many as 74 companies are scheduled to report results for quarter ended June which include names like Capital First, Godrej Properties, Indiabulls Housing Finance, Marico, MOIL, Mold Tek, ONGC, Pfizer, The Ramco Cements, Shakti Pumps, TCI and Visaka Industries among others.
With inputs from Reuters & other agencies
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