MUMBAI: The benchmark index Nifty reclaimed a psychologically important peak of 11,000 to close at 11,062, while BSE Sensex closed at 36,975, a day ahead of Reserve Bank of India’s sixth bi-monthly policy announcement. The markets stayed buoyant post-budget on the hopes of higher consumption and related stocks gaining traction; hopes are now on for interest rate cut by RBI.
Though the odds are not in favour of a rate cut that can hopefully spur credit growth and aid the consumption story, a dovish stance can be sentimentally positive for the stocks, said traders. Bloomberg said that out of the 32 economists surveyed by the agency on Tuesday, only eight expected the RBI to lower the benchmark lending rate. How the banking stocks and the rate-sensitive ones react to RBI’s decision are to look out for on Thursday, it said.
The pace of trade has been brisk for the Nifty to close at the highest point in last five months, and the futures and options trade positions indicate that the rally would continue towards 11,300-11,400, said Sneha Seth, derivatives analyst, Angel Broking.
Though these two benchmarks have risen, the market is yet to catch up. For instance, the broader BSE-500 that closed at 14,450.95 on Wednesday is yet to catch up with the 52-week and also lifetime high of 15,937 it hit in early May 2018. The mid-cap and smallcap indices are also way below their 52-week highs.
Even among the Nifty and Sensex stocks, it is a handful of stocks, especially IT and private banks, which have been holding them up, traders say. In fact, even as the top indices moved up on Wednesday, the broader markets were not in the mood to catch up till much of the early trade. At the close of the trading too, declines outnumbered advances at 1,563 to 1,008 on BSE.
“All sectorial indices closed in green. However, the buying remained largely stuck to blue chip stocks as the mid and small-cap indices were down in trade today. Stock-specific movement continued to govern the market trend,” said Satish Kumar, senior research analyst, Choice Broking.
SEBI asks stock exchanges to step up vigilance
Capital markets regulator Securities and Exchange Board of India (SEBI) has asked the stock exchanges to step up vigilance for any possible manipulation in stocks that are seeing high volatility to report any irregularity urgently for further action, PTI reported. The vigil is on any unusual intraday positions, order and trade level surveillance. The exchanges have also asked their respective trading members to enhance their own monitoring of intraday trading activities of their clients and proactively report any adverse observation immediately.