Stock Market Short Term Outlook: The Reserve Bank of India (RBI) has not made any change in the interest rates in the Monetary Policy Review of December 2023 and has kept the repo rate at 6.50 percent. At the same time, the estimate of GDP growth has been increased from 6.5 percent to 7 percent. RBI has estimated that in the third quarter of next year, inflation will also come within the target range set by the Central Bank. At present, due to all these factors the stock market sentiments improved and Nifty crossed the level of 21000 for the first time. Experts say that although the rate pause was already a discount factor for the market, the GDP growth estimates are a positive sentiment. There has been a significant rise in the market (Sensex, Nifty) in the recent past, hence we cannot expect much rise in it in the short term. Some selling may be seen in the coming days before the next rally starts.
Market may move towards 21275/21500
Santosh Meena, Research Head, Swastika Investmart, says that the RBI policy has not made any change in the policy rates or stance and has maintained the expected line. RBI Governor Shaktikanta Das has expressed confidence in economic growth, expecting inflation to reach 4.2 percent by the third quarter of 2024. There is a boom in the stock market, Nifty has crossed the magical figure of 21000 today i.e. on 8 December 2023. He says that this momentum in the market is expected to continue in future also. However, some consolidation may be seen from time to time. Banking and financial stocks are particularly well placed to outperform given their current valuations and fundamental strength. In the mid term, Nifty may move towards 21275/21500 and Bank Nifty may touch the level of 48800/50000.
Bond yield expected to be in the range of 7.10-7.35%
Radhavi Deshpande, President and Chief Investment Officer, Kotak Mahindra Life Insurance Company Limited, says that in the monetary policy, it was already anticipated to keep the interest rates on pause and maintain the stance. The MPC has set a target of bringing the CPI to 4%, which is still to be achieved, while the GDP estimate has been revised higher. The MPC acknowledged the need to closely monitor the increased volatility in food inflation as well as remain cautious against further tightening. The market will continue to favor a long-term pause on interest rates with ample liquidity for this financial year. Concerns over RBI’s measures to address liquidity through OMO sales will be allayed. The stock market will remain in a limited range in the coming days while the stance of RBI will depend on global and domestic data. The yield on 10-year government securities is expected to remain in the range of 7.10-7.35%.
Selling may come before the next rally
Founder and CEO of SAS Online, Shrey Jain says that today after the announcement of RBI policy, Nifty has crossed 21000 for the first time. Whereas Sensex also strengthened by 300 points and reached the level of 69,831. The market is expected to remain rangebound in the short term. During this period, Nifty is expected to remain in the range of 20,850-21,000. Now a support zone of 20,675-20,725 level is visible for Nifty, while there is resistance at the level of 20,940-21,000. Similarly, support for Bank Nifty can be in the range of 46,500-46,650, while the resistance level for it will be 46,925-47,000. He says that a consolidation may be seen before the next rally in the market.