Almost all broad market indices, including Nifty mid caps and small caps rebounded by over 1%, with micro caps rising about 2.19% in early trade. India VIX fell 14.10%, after inching up around 42% yesterday. All sectoral indices also opened the day in green, with auto, metal and realty correcting over 2% during early morning trade.
Aditya Gaggar, director of Progressive Shares noted that in the lower time frame, an extremely oversold condition was observed, and thus, a short-term pullback is warranted. The immediate support is placed at 23,860 while on the higher side, 24,250 will be considered a hurdle.
"After a steep fall in the previous session, a strong reversal was seen in the global markets and an early indication from GIFT Nifty (+200 points) suggests the same, now sustainability at the higher levels will be a key factor to watch out for. After a vertical fall, the near-term trend of almost all sectors has turned bearish, investors should wait for a while to get the market stabilized", he continued.
RBI's MPC (Monetary Policy Committe) meeting will start today, with a decision related to interest rate hike or cut to be announced on August 8, 2024. The repo rate was last increased to 6.5% in February, 2023. Experts are not anticipating any rate changes in the upcoming session.
Parijat Agrawal, Head – Fixed Income at Union Mutual Fund explains that the inflationary pressures have cooled off and monsoon worries have subsided. The fiscal consolidation seems to have given the required comfort as it follows the glide path. "We expect the policy to have a dovish tilt taking cognizance of the recent weakness in global economy and volatility in financial markets. We expect the policy rates to remain unchanged; Monetary Policy Committee may change the stance to neutral" , he said.