Last week – review
Going into trade last week, we were cautious as market rally seems to be showing some sing of weakness post Budget on 1-Feb-24. We see budget as non-event as there was no major expectation as it was Vote-On-Account ahead of general election in April – May 2024. Market this week ended with minor cuts as RBI MPC policy was due this week.
Technical Insight
• Nifty in last two week has been trading in range of 21411 to 22115, Nifty has made double top on last Friday would act as resistance level. Nifty range expected this week is 21680 to 22115.
• Banknifty range for this week is expected to be 45295 to 46571. Any major move in Banknifty expected once this range is broken on either side.
Approach on Technical: Indian market reacted to Budget last week and RBI MPC policy this week. We expect indices to follow technical direction as there are no major scheduled event, outcome of which can impact market direction.
Nifty @ 21680 & Banknifty @ 45295 to act as important support level. If indices break this level – fresh downside could be expected, otherwise we see indices could attempt fresh up move.
Fundamental Insight
RBI Monetary Policy Key Takeaways
• To keep the repo rate unchanged at 6.5% by a 5:1 majority.
• The standing deposit facility rate, pegged 25 basis points below the repo rate, is at 6.25%.
• The marginal standing facility rate, which is 25 basis points above the repo rate, is at 6.75%.
The MPC also decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.
India To Sell $11.6 Billion Airwaves to Boost Phone Networks
India’s federal cabinet Thursday approved a plan for selling airwaves in an auction to improve quality and coverage of networks in the world’s second-biggest telecom market.
Forex Reserves Jump To $622.469 Billion
India’s forex reserves jumped by $5.736 billion to $622.469 billion for the week ended Feb. 2, the Reserve Bank said on Friday. In the previous week, the overall reserves had increased by $591 million to $616.733 billion.
Equichain Wealth Advisors: Market View & Strategy
We have remained cautious in last few weeks and continue to remain cautiously optimistic but will continue to follow strategy of fresh allocation on correction.
We see market at current level has factored in political stability, US fed pivot on interest rate and earnings season so far has failed to provide fresh positive triggers. Rally in PSU stocks continue on optimism of political stability, but we do believe valuation are stretched in near term.
We would continue to keep exposure around 75% and major allocation would be preferred on correction. We may review our stance incase indices hit fresh high supported by some positive triggers on interest rate going down or any other substantial news which could change market narrative.