Nifty holds 17350 after RBI MPC hikes repo rate, charts show indecisiveness; rally possible on 17500 breakout

Nifty holds 17350 after RBI MPC hikes repo rate, charts show indecisiveness; rally possible on 17500 breakout

Domestic equity market benchmarks BSE Sensex and NSE Nifty 50 ended the choppy session in green on Friday, after the RBI MPC raised the repo rate for the third straight time this fiscal. BSE Sensex gained 89 points or 0.2 per cent to settle at 58,388, while NSE Nifty 50 finished trade at 17,398, up 15.50 points or 0.1 per cent. Stocks of index heavyweights such as ICICI Bank, Infosys, Bharti Airtel, Ultratech Cement, and Axis Bank contributed the most to keep the S&P BSE Sensex in green. Broader markets also traded in line with equity frontliners. S&P BSE MidCap index gained 20 points to end at 24,479, and S&P BSE SmallCap index settled at 27,605. Bank Nifty index ended at 37,920.60, up 0.4 per cent. Banking index witnessed sideways consolidation throughout the week. Analysts say that Nifty trend is likely to remain sideways to negative as long as it remains below 17500.

Also read: What RBI MPC’s 50bps repo rate hike means: Inflation to stay above comfort zone; another 50bps hike on cards?

Though the market was volatile, it moved in a small band as investors traded with caution after the recent upsurge. However, the positive thing was benchmarks managed to rebound in late trades to end in the green. With the overhang of monetary policy now behind us, the geo-political tension between China & Taiwan will be in focus, as any flare up in the region may lead to panic situations across the globe. Technically, on weekly charts, the index has formed a bullish candle. Further, daily and intraday charts are indicating the continuation of a non-directional activity in the near future. The short texture of the market is still on the bullish side but a fresh uptrend rally is possible only after the 17500 breakout level. Above the same, the index could rally up to 17600-17750. On the flip side, below 17500, the index would retest the level of 17250-17200 and if the downside continues, it may correct up to 17050-17000.

Kunal Shah, Senior Technical Analyst, LKP Securities

The Bank Nifty index witnessed sideways consolidation throughout the week and is stuck in a broad range between 37,200-38,200 levels. The index needs to break on either side on a closing basis for trending action in the coming week. The index on the intraday chart is trading in an oversold category and the profit booking scenario cannot be ruled out from the current levels.

Also read: GAIL share price tanks 4% despite healthy Q1 earnings; should you buy, hold or sell?

Rupak De, Senior Technical Analyst, LKP Securities

Nifty remained range bound before closing flat for the day. On the daily chart, it formed a Doji pattern which suggests indecisiveness. The momentum indicator RSI is in bullish crossover. The trend is likely to remain sideways to negative as long as it remains below 17500. On the lower end, support exists at 17200/17000.

Vinod Nair, Head of Research, Geojit Financial Services

Despite the rate hike being on the higher side of the expectations, the market welcomed the RBI’s move of 50 basis hike with rising bond yields. Even though metals prices are softening, RBI decided to keep FY23 inflation targets unchanged at 6.7 percent, which is above the tolerance level. However, given that Q3 and Q4 inflation is anticipated to be between 4.0 per cent and 4.1 per cent, the market is hopeful for the future.