Traders will keep a close on RBI policy which is likely to dictate the trend for markets in trade today.
The Reserve Bank of India's monetary policy review on Tuesday would set the tone for the stock market in a holiday-shortened week ahead.
The new rates linked the external benchmark rate of the repo rate, will be effective May 1.
"The cut is welcome, but I wished if he had done this kind of thing - even 25 bps - six or seven months ago, maybe we would not have been in the situation we are in today."
The yields on benchmark ten year government bonds rose 3 basis points, as Reserve Bank signaled scope for future rate cuts is limited.
Irani believes that in case the RBI maintains a status quo on policy rate on September 29, then we may see markets correcting further.
The focus of the RBI in its second-quarter review of monetary policy was on currency stability, inflation and making financial markets more efficient.
All the analysts polled expect the RBI to maintain status quo on cash reserve ratio.
The local currency climbed to a fresh one-month high of 68.26 last week.
"The yield curve is clearly factoring in at least 3-4 rate hikes from the RBI."
RBI tweaked its policy stance to 'calibrated tightening' from 'neutral'.
The rupee also breached the 74-mark against the dollar for first time after the policy.
Analysts expect significant volatility closer to the Fed and RBI meetings in second half of this month and a decline thereafter.
As much as 12.84 lakh shares of Mukesh Ambani-led company traded on BSE today.
Purchase of Nifty options, comprising mostly puts, soared to Rs 11,500 crore in August, the highest it has reached so far this year.
RBI in its third bi-monthly monetary policy today kept the key policy rate unchanged but slashed SLR by 0.5% to unlock about Rs 40,000 crore into the system.
The RBI kept policy rates unchanged at its policy meet today. Repo rate was left unchanged at 8 per cent and reverse repo rate at 7 per cent.
The 50-share Nifty index reclaimed its crucial psychological level of 7700, supported by gains in FMCG, pharma, auto, metal and power stocks.
Investors will keep a close eye on outcome of RBI policy review due today which is likely to dictate the trend for the markets.
Analysts polled by ET Now expect the rate cut cycle to begin next year. 60% of respondents expect the rate cut cycle to begin from Q4 FY15.
Besides, the trend in investment by overseas investors, global cues, movement of rupee against dollar, oil prices will hold key for the markets.
Investors were worried over a plunge in rupee's value to an all-time low level of 73 against dollar.
The local currency opened 34 paise down at 73.25 against dollar.
Equity benchmarks erased early gains and turned flat ahead of RBI policy meet beginning today.
Ahead of the meet, we bring you the wish list of some bankers who spoke to ET Now.
The Nifty Pharma index was trading 1.09 per cent down at 9,864 around 12:55 pm.
Godrej Properties was the only component of the index that was in the green at that time.
However, a majority of index components still were under pressure.
JSW Steel is a 'Sell' call with a target price of Rs 364 and a stop loss of Rs 392.
Among the 50 stocks in the Nifty index, 14 were in the green and 36 were in the red.
The NSE Nifty index was trading 37 points down at 10,894, while BSE Sensex was down 83 points at 36,145 around 10:10 am.
YES Bank was leading the pack of most active stock in value terms.
Uncertainty over the RBI policy meet later this week weighed on investor sentiment.
If GST would have passed in this Parliament session, then it would have been a positive catalyst for the markets as well as the economy, says Aggarwal.
Steady selling of the greenback by exporters and banks gave the local unit strength.
The S&P BSE Sensex slipped over 300 points in trade on Tuesday after the Reserve Bank of India maintained a status quo.
The 7.72% government security maturing in 2025 moved down to Rs 99.35 from weekend level of Rs 99.40, while its yield remained stable at 7.8%.
Traders in derivatives markets are creating bullish bets on select interest rate-sensitive stocks, like banking and automobiles.
RBI is in the ‘wait and watch mode,’ closely watching the progress of monsoon to take its fire plan of action regarding interest rate cuts.
However, RBI has said it would watch out for the data, including inflation, and the monsoon progress before any change in its policy rates.
MUMBAI: Rupee fell to 59.64 or 0.39% against the dollar after the Reserve Bank of India announced the monetary policy keeping policy rates unchanged.
Although RBI has kept the key policy rates unchanged, now it is up to the banks on whether they will keep interest rates where they are or raise them.
"Logically a repo rate hike should have resulted in a selloff in the markets but the markets rose instead,"
Market can be taken down so easily so there has to be a jolt to the sentiment in those policy sensitives for the market to get into a deeper correction.
RBI policy is probably significant event to look at tomorrow. A lot of people are waiting to look at it given the fact that the RBI governor has been meeting the PM a couple of times.
If we have reasonably well spread out monsoon even with that deficiency, it would be seen as a positive trigger for the market, he said.
The rate-setting MPC was unanimous in shift in stance, which voted 4-2 in favour of a lower rate.
'Markets were waiting for this kind of correction to happen, so it is a great opportunity for investors who are buying India for the long term.'
"The valuations were running ahead of the time. The Q4 numbers did not actually support that. So, RBI policy was just a trigger."
SBI lending rate now at 9.7 per cent, Allahabad Bank cuts rates to 9.95 per cent, while Dena and Punjab & Sind Bank follow at 10 per cent.
Here is a list of top ten rate-sensitive stocks from experts where investors can safely park their funds for next one year.
Shares of rate-sensitive cos such as banks, realty, auto and capital goods were trading in a range on Tuesday, ahead of RBI meet.
If the market starts going down despite a rate cut, then that would be a significant sell signal, says Gujral.
The S&P BSE Sensex closed 20 points higher on Monday, a day ahead of the Reserve Bank of India's monetary policy meet.
The yield on benchmark government bonds has fallen more than 30 basis points over a month amid rising trade volumes.
BSE Banking index was trading 1.5 per cent lower as compared to 0.3 per cent fall in the BSE Sensex, which was trading at 22,312.
"Among all emerging markets, India stands out. It is really jumping ahead of the others."
The Nifty opened on a buoyant note and registered a high of 5971.20 in the initial part of the week. It witnessed resistance from higher levels.
Right now, the RBI seems to be quite comfortable with the current projection of GDP, says Iyer
Nifty futures on the Singapore Exchange were trading 18.50 points, or 0.17 per cent, lower at 11,086.50, indicating a negative start for the Nifty50.
Rate sensitive sectors such as banks, realty, auto and capital goods were trading in a rage on Tuesday, ahead of the RBI policy review.
Sensex surged as much as 109 points in trade on Tuesday, ahead of Reserve Bank of India's crucial bi-monthly monetary policy review.
Q4 results would be a mixed bag for banks; one may face disappointment in certain pockets, including PNB, OBC, Bank of Baroda, and Bank of India, says Shah.
“We are neither hawks, nor doves. We are owls. The owl is traditionally a symbol of wisdom. We are vigilant when others are resting," Rajan said.
Sensex advanced 34 points to close at 36,617, while NSE Nifty settled at 10,934, up 22 points.
NPA recovery and cut down on slippages helped PNB report profit this quarter, says Prabhakar
Rate-sensitive stocks which plunged in trade after the RBI decided to raise repo rates by 25 bps to 8% recouped most of the losses.
Ahead of RBI's Q3 monetary policy, the ten-year benchmark bond yield fell four basis points or 0.46 per cent pushing prices higher in the early trade on Tuesday.
"Markets will be stay stuck in a range and on the downside, 6150-odd levels may narrow down to 6240, whereas the upside looks capped around 6330-6340."
Heavy buying in RIL came despite caution ahead of the Reserve Bank of India's monetary policy review.
Ahead of the RBI's monetary policy review, Economic Affairs Secretary Arvind Mayaram has pitched for shifting the policy focus to growth as interest rates do not have a bearing on food inflation.
BJP today described the cut in Cash Reserve Ratio and Repo Rate as "insufficient and inadequate".
The Nifty Private Bank index was trading 0.05 per cent down at 13,946 around 01:05 pm.
Growth is need of the hour now and it can be done through monetary policy, says Ghosh
Sensex had its worst fall on Aug 24, 2015, when it plunged 1,624.51 points in a single day.
Trade war has increased risk sentiment with the US equities trading higher.
Global oil prices have been on a boil, hurting the rupee, as India imports nearly 80 per cent of its crude requirements.
Market extended its post-RBI policy rally on widespread buying, with banking, metal and realty sectors leading the gains.
The benchmark ten year bond yields on Wednesday dropped 12 basis points or 135 per cent to close at 8.78 per cent hitting two-week low.
At 10:00 a.m.; the S&P BSE Bankex was up 0.26 per cent, the S&P Auto Index was 0.42 per cent higher and the S&P BSE Realty Index gained 0.71 per cent.
Equity markets were up ahead of the RBI policy outcome scheduled for later in the day.
The apex bank may deliver its first interest rate hike in nearly 4.5 years, says a Reuters report.
Shares of Jet Airways, SpiceJet and IndiGo hit 52-week low of 163.70, 64.05 and 768.25, respectively, on BSE today.
Market was subdued ahead of RBI's policy decision due tomorrow.
By 10:45 am, as many as 293 stocks had hit 52-week lows on NSE.
Shares of Adani Group companies came under selling pressure on Monday.
"A small trigger would be the December 8th RBI policy review and the big trigger would be what really happens in the state elections. "
Disappointing results from PNB also hurt market sentiment as banking shares had risen sharply over the past few months on expectations of a recovery in the sector.
The Reserve Bank of India left repo rate unchanged at 7.75 per cent and CRR at 4 per cent. It cut SLR by 50 bps to 21.50 per cent from 22 per cent.
Rate sensitive stocks came under pressure, after the Reserve Bank of India on expected lines left repo rate unchanged at 7.75 per cent.
According to a poll, 80% of poll participants says that RBI will not cut rates, while 20% bankers are predicting a 25 basis points repo rate cut.
Profit-booking in recent outperformers, disappointing earnings from some bluechips and mixed global cues also weighed on the sentiment.
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