Stock Market: In RBI MPC meet shadow, indices stay sideways; autos gain grounds

Spread the love

By S Jha

New Delhi, June 6: The Reserve Bank of India began its three days long meeting of the monetary policy committee amid wider expectations that pause will be the theme on the rate hike. The inflation at 4.7 per cent, below the RBI estimate, gives cushion to the Central Bank to stay on accommodative stance.

The MPC meeting will also take stock of the factors guiding the economy on the growth path as the GDP hit 7.2 per cent mark in the last fiscal, 6.2 per cent in the March quarter. With inflation moderating and Monsoon on the cusp of arriving, the RBI is widely expected to not give any negative trigger to the equity markets.

Nifty is facing resistance in the congestion zone of 18650-700, while being bullish. Bank Nifty outperformed the broader market, as Axis Bank and Kotak Mahindra Bank led the charges in the index. Bank Nifty is seen to have made a base at 44000 level. Both Nifty and Bank Nifty are being reckoned by the market participants to be in the bullish zones.

Auto sector has been leading the rally in the equity markets. Maruti, Tata Motors and Mahindra and Mahindra have been outperforming the markets. The three auto leaders gained further grounds on Tuesday. Mahindra and Mahindra is now above its all-time high mark. Maruti is now looking at the Rs 10000 mark. Tata Motors is also comfortably above Rs 550 level.

Nifty felt the pressure on account of the selloff in the IT index, as largecaps such as Infosys, Tech Mahindra lost almost two per cent each to keep the rise in the index under check. Yet, Nifty shrugged off the bear pressure to launch into gains in the last hour of the trade to again close at about 18600 level.

Fund action was also almost flat, as buys by the foreign institutional investors were negated by the sell by their domestic counterparts. The smallcaps and midcaps continue to gain grounds on the bourses, suggesting value buying being the theme on the Dalal Street.

Nelco, a Tata company, gained strongly on Tuesday, rising by almost 15 per cent. The railway stocks were again in demand amid anticipations that the government will further step up expenditure in the sector in the backdrop of the Odisha rail mishap. The likes of Titagarh Wagons, IRCON, Rail Vikas Nigam Limited were in demand on Tuesday. Besides, Divi’s Lab, a badly beaten stock, continued its rally on Tuesday.