RBI Monetary Policy outcome today; brace yourself as volatility is likely to return with vengeance
Even though Nifty recorded a fresh all-time high of 13,216 on Thursday, it failed even in its third attempt to close above the level of 13,145 (high as of November 25).
However, it managed to close above the previous day’s high. Mostly sideways action was seen throughout the day, which was an indifferent behaviour on a weekly expiry day. Despite a choppy & sideways movement in the index, traders grabbed the opportunity with both hands to trade on stock-specific action as many stocks were seen moving with high momentum.
Going into the final trading session of the week, the advantage is again with the bulls despite the lackluster cues from the global peers. SGX Nifty is trading higher by 38 points and at 13,241 levels. The early advantage to the bulls is due to the statement made by the Finance Ministry. They expect the economy to perform better in the third quarter on the back of sustained improvement in major indicators seen after September. Adding to the positive chorus is the incoming data on the Direct Tax collection front, contraction in direct tax collection narrowed considerably in November, aided by sizeable advance in personal income tax and corporation tax mop-up.
India VIX, which had dropped nearly 5 per cent in the last trading session and touched the 19 mark, could see a surge today on the back of the RBI monetary policy outcome. The street consensus is that RBI is likely to keep interest rates unchanged. We also moot this idea as the retail inflation for the month of October has surged to its highest level in the past six years and is way above the upper range of RBI’s level. Further, contraction patterns were formed in Nifty as well as in the Bank Nifty. Nifty had formed an NR4 pattern and Bank Nifty had formed an inside bar. So expect it to be an action-filled day.
The majority of the Asian markets were trading in negative territory on Friday, following mixed cues from overnight from Wall Street. Japan’s Nikkei 225 was down by 0.54 per cent, followed by China’s Shanghai Composite, which traded lower by 0.40 per cent and Hong Kong’s Hang Seng slipped 0.20 per cent.
US stock markets rally fizzled out towards the end of the trading session as early optimism amid talks of fiscal relief package resurfaced. Besides, jobless claims moderated more than expected and faded on the back of grim news late in the day about Pfizer facing supply-chain obstacles with the rollout of its vaccine and this could lead to a delay in the roll-out of the vaccine. As a result, the stocks ended on a mixed note. Dow gained the most as it advanced 0.3 per cent and this was on the back of a strong performance by Boeing as the stock closed nearly 6 per cent higher. The tech-heavy added 0.2 per cent, while S&P 500 ended in negative terrain. European indices too ended on a mixed note amid concern over Brexit talks.