Nifty will depend on Outcome of RBI's monetary policy

Nifty will depend on Outcome of RBI
Highlights

Last week Nifty future was on roller coaster ride but managed to close in positive amid high volatility to hit its highest levels in more than 12 weeks. The positive sentiments in the markets was triggered by the latest comments from the US Federal Reserve that it would move slowly raise interest rates in 2016. Market breadth indicating the overall health of the market was mixed as buying was witn

Last week Nifty future was on roller coaster ride but managed to close in positive amid high volatility to hit its highest levels in more than 12 weeks. The positive sentiments in the markets was triggered by the latest comments from the US Federal Reserve that it would move slowly raise interest rates in 2016. Market breadth indicating the overall health of the market was mixed as buying was witnessed in sectors specifically in banking, metals, cement, infra, capital goods and select mid cap stocks etc.

The key event for the markets scheduled early next week is monetary policy review from Reserve Bank of India. The RBI will announce the first bi-monthly monetary policy statement for FY 2016-17 on Tuesday, 5th April 2016. Expectations are that the RBI will cut lending rate by at least 25 basis points. The government's announcement of a reduction in interest rates on small savings schemes for Q1 June 2016 and dovish comments from US Federal Reserve have reinforced market expectations of a rate cut from the RBI. Outcome of RBI's monetary policy, trend in global markets, investment by foreign institutional investors (FIIs), movement of crude oil prices will dictate trend of the market in near term.

Nifty Future gave weekly closing at 7748.75 with marginal gains of 12.45 points.
Technically, in daily charts short term trend of Nifty Future is up as it gave positive weekly close above 7700 levels and sustaining above 100 DMA. Level of 7600 will now act as a strong support as it bounced from the levels during the week. Thus, in near future, it may test the levels of 7800 levels which is its next immediate resistance level and on downside immediate support level is at 7600 levels.

By Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd.

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