By Nifty remains in a bullish trajectory as the market anticipates the RBI’s monetary policy announcement. The Gift Nifty, trading flat at 22,902.50 with a slight increase of 3 points or 0.01%, suggests a steady start for the domestic market on Friday. Investors and market participants are eagerly waiting for the RBI’s stance on monetary policy and the guidance that will follow, as well as updates related to ministry allocations in the new government.
Market experts predict that the RBI will maintain its current stance, keeping the policy unchanged until inflation is reined in within the target range. This expectation is driven by the need to stabilize the economic environment amidst various challenges such as extreme weather conditions, market volatility, and geopolitical tensions.
The recent political developments, particularly the support from key allies to form a new government with the BJP, have also bolstered investor confidence. Siddhartha Khemka (Head of Retail Research at Motilal Oswal Financial Services) noted that this political stability has been a significant factor in the recent market rally.
Global factors have also contributed to the positive market sentiment. The possibility of a rate cut by the US Federal Reserve in its September meeting, spurred by weaker-than-expected jobs data, has revived hopes among investors. As a result, the focus is now on the government formation process this weekend, the European Central Bank meeting, and the RBI policy outcome and commentary.
Vinod Nair (Head of Research at Geojit Financial Services) emphasized that the upcoming RBI policy is likely to be a non-event for the markets. Instead, the market will closely watch the inflation and GDP forecasts for FY25. A reduction in inflation and an increase in GDP trajectory would be positive, though significant changes are not expected in this policy meeting. The upcoming coalition structure, the monsoon’s progress, and the Foreign Direct Investment (FDI) policy review are also crucial elements that will influence future policy decisions.
From a technical perspective, the Nifty has returned to a bullish terrain with broad market participation underscoring this trend. Osho Krishan (Senior Analyst at Angel One) pointed out that the RBI monetary policy outcome will likely dictate the near-term market trend. Key technical levels include the 20-day SMA around 22,600 and the 61.80% Fibonacci retracement level of 22,552, which are expected to provide a supportive foundation. On the upside, the 23,000 mark presents significant resistance, necessitating a cautious approach as the market nears this level.
Hrishikesh Yedve from Asit C Mehta Investment Intermediates observed that Nifty50 has formed small bullish candles with immediate resistance around 23,000, followed by 23,340. Immediate support is identified near 22,520, the 34-Day EMA, with further support at 22,000. Shrikant Chouhan of Kotak Securities highlighted that for day traders, 22,650 would act as a critical support level, and as long as the market trades above this level, the positive sentiment is likely to continue.
The Nifty Bank has experienced a range-bound day. According to Jatin Gedia from Sharekhan, the RBI policy event is expected to impact the Bank Nifty significantly. Key support levels are around 48,800-48,500, with resistance in the 49,700-50,000 zone. The Bank Nifty is likely to consolidate around the 49,000 mark in the upcoming session.
Rupak De from LKP Securities noted that the Bank Nifty formed an indecisive candle, indicating market uncertainty. Support near the 10-Day Moving Average suggests a potential rebound, with a bullish trend sustained above the 21-DMA. The key levels to watch include 48,600 as crucial support and 49,800 as resistance, which will determine the market’s direction ahead.
