Mumbai: If the Reserve Bank of India’s Monetary Policy Committee (MPC) clearly says that it will hold off on raising key rates after another round on April 6, bears will run for cover, but if the rate-setting committee’s language Will remain on future actions Market experts say it is possible.
Markets have priced in a 25 basis points hike, but will closely track the commentary on the MPC’s outlook. “Markets have discounted the 25 bps hike, but will take cues from the language of the MPC,” said Nilesh Shah group chairman and managing director at Kotak AMC. , but if it’s temporary the shorts will stay.”
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Since Indian markets are not driven by rates alone, factors such as crude oil price and earnings performance will determine the course, if the market finds the MPC’s remarks leave room for doubt on rate pause, Shah said.
FPIs have covered some of their cumulative bearish positions on Nifty as well as Bank Nifty futures contracts from a record high of 196,378 on March 22 to 140,645 on April 3. During this period, Nifty rose by 1.4% to 17,398.05 and Bank Nifty rose by 2% to 40,813.05.
Along with outstanding shorts, they have also sold shares worth $2.9 billion so far this calendar year. To be sure, they have become net buyers of 0.97 billion in March and 0.28 billion in April so far. Nirmal Jain, chairman and founder, IIFL Group, said, “Markets have rallied 25 bps, so the comment will assume significance.”
Andrew Holland, CEO of Avendus, expects a “short covering-induced” rally from current levels if the MPC gives an accommodative comment, anticipating a moderate inflation. The pause after 10 consecutive rate hikes by Australia’s central bank is a sign that a rate cycle may be occurring globally. Be close to a peak, he said.
Apart from volatile energy and food prices, the main concern for the RBI is inflation, which stands at 6.1%. DK Joshi, chief economist at Crisil, said the impact of the rate hike since May last year would be seen with a lag and core inflation could come down to 5.5%.
Rohit Srivastava, Founder, Indiacharts expects Nifty to trend upwards in 17200-17750 range, while Bank Nifty will also be biased upwards in 40060-41660 range after the MPC meeting.
Rajesh Palvia, VP (Technical & Derivatives Research) Axis Securities is confident of continued short covering rally with HNI and corporate investors squeezing out short FPIs.
His range for Bank Nifty is 40300-41500 with an “upside” bias amid imminent MPC result after April 6.
Crude oil rose 6% on Monday after OPEC+ announced a production cut of 1.16 million barrels per day, effective from May, to support prices over the weekend.
Know your inner investor Do you have guts of steel or are you a victim of insomnia regarding your investments? Let’s define your investment approach.
Dovish MPC may hit FPI shorts
Mumbai: If the Reserve Bank of India’s Monetary Policy Committee (MPC) clearly says that it will hold off on raising key rates after another round on April 6, bears will run for cover, but if the rate-setting committee’s language Will remain on future actions Market experts say it is possible.
Markets have priced in a 25 basis points hike, but will closely track the commentary on the MPC’s outlook. “Markets have discounted the 25 bps hike, but will take cues from the language of the MPC,” said Nilesh Shah group chairman and managing director at Kotak AMC. , but if it’s temporary the shorts will stay.”
View Full Image
Since Indian markets are not driven by rates alone, factors such as crude oil price and earnings performance will determine the course, if the market finds the MPC’s remarks leave room for doubt on rate pause, Shah said.
FPIs have covered some of their cumulative bearish positions on Nifty as well as Bank Nifty futures contracts from a record high of 196,378 on March 22 to 140,645 on April 3. During this period, Nifty rose by 1.4% to 17,398.05 and Bank Nifty rose by 2% to 40,813.05.
Along with outstanding shorts, they have also sold shares worth $2.9 billion so far this calendar year. To be sure, they have become net buyers of 0.97 billion in March and 0.28 billion in April so far. Nirmal Jain, chairman and founder, IIFL Group, said, “Markets have rallied 25 bps, so the comment will assume significance.”
Andrew Holland, CEO of Avendus, expects a “short covering-induced” rally from current levels if the MPC gives an accommodative comment, anticipating a moderate inflation. The pause after 10 consecutive rate hikes by Australia’s central bank is a sign that a rate cycle may be occurring globally. Be close to a peak, he said.
Apart from volatile energy and food prices, the main concern for the RBI is inflation, which stands at 6.1%. DK Joshi, chief economist at Crisil, said the impact of the rate hike since May last year would be seen with a lag and core inflation could come down to 5.5%.
Rohit Srivastava, Founder, Indiacharts expects Nifty to trend upwards in 17200-17750 range, while Bank Nifty will also be biased upwards in 40060-41660 range after the MPC meeting.
Rajesh Palvia, VP (Technical & Derivatives Research) Axis Securities is confident of continued short covering rally with HNI and corporate investors squeezing out short FPIs.
His range for Bank Nifty is 40300-41500 with an “upside” bias amid imminent MPC result after April 6.
Crude oil rose 6% on Monday after OPEC+ announced a production cut of 1.16 million barrels per day, effective from May, to support prices over the weekend.
Know your inner investor
Do you have guts of steel or are you a victim of insomnia regarding your investments? Let’s define your investment approach.
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