About 1% of stocks on strong credit, tax data

Analysts said markets are not expecting any surprises from Thursday’s Monetary Policy Committee (MPC) meeting. Decreasing fiscal and current account deficits as well as increasing deposit and credit growth are seen as positive signs for growth.

Vinod Nair, head of research, Geojit Financial Services, said, “On the back of strong quarterly data from banks and NBFCs and unexpected tax cuts, the domestic market is showing resilience, unaffected by weak global peers.” According to Nair, investors expect from RBI. The 25-basis-point (bps) rate hike, before taking a pause, was seen as a positive move for the markets.

Analysts said deposit growth and loan disbursement data indicate strong credit demand, reinforcing the view that economic growth will cross 6% in FY2024.

Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd, said manufacturing activity reaching a three-month high of 56.4 is also encouraging and indicates strong demand. Strong growth, he said. Khemka expects the market to move higher as over the long term, midcaps have shown momentum, and hence action can be seen in the broader markets.

Foreign portfolio investors (FPIs) made purchases temporarily 806.82 crore shares on Wednesday. Analysts said some short-covering by FPIs ahead of the Monetary Policy Committee (MPC) decision is also likely to help, with profit-booking seen in auto and banking sectors.

Domestic Institutional Investors (DIIs) temporarily sold 947.21 crores on Wednesday. Buying was witnessed in FMCG, IT and financial services stocks and all sectoral indices except auto and energy ended in the green.

Shares of Adani group companies showed a mixed trend. Among Nifty stocks, Adani Enterprises declined 0.93%, while Adani Ports and Special Economic Zone gained 1.3%. Of the remaining eight Adani group scrips, two closed with gains while six closed with losses.

Wednesday’s gains in Nifty stocks were led by HDFC twins, followed by ITC Ltd, which ended with gains of over 2%. Hindustan Unilever Ltd, Grasim Industries Ltd and Sun Pharmaceuticals Ltd were also major gainers, ending the day up over 1.8% each.

Deepak Jasani, head of retail research at HDFC Securities Ltd, said, “Nifty edged well on Wednesday, and was just three points short of filling the down gap made on March 10, from its intraday high. Once it was above 17,574 If it rises, it may open further (and) move towards 17800. On downside, the 17,428-17,451 band may provide support.

Analysts said recent US data showed a softening of the labor market and a drop in factory orders, raising the prospect of a rate hike by the Federal Reserve. Due to this, the dollar index is softening and the US bond yield is also falling.

The rupee had closed 33 paise stronger on Wednesday. 82 to a dollar. Anindya Banerjee, vice-president, currency derivatives and interest rate derivatives at Kotak Securities Ltd, attributed this to selling by exporters and triggering stop losses of speculators.

Banerjee said that with the dollar index trading at its lowest level since the beginning of February, the demand for the rupee remains strong. In the near term, RBI policy and US jobs report will be the key to currency movement, and Banerjee expects the spot to trade at Rs 81.70 and 82.30.

Brent crude, which was trading below the $70 per barrel mark last week, however continued to trade near $85 on Wednesday after OPEC+ countries announced an additional production cut of 1.66 million barrels per day.