Stock Market: Indices shrug off RBI monetary policy action fear
By S Jha
New Delhi, April 5: Weakening dollar index outweighed sharp rally in the crude oil prices to help the equity indices to a short term high on Wednesday. The Reserve Bank of India will unveil its fresh set of monetary policy action on Thursday, the day of weekly option expiry, but the fear factor seemed subsided on the Dalal Street.
Thumb rule among the traders on the street is that when the HDFC twins rally, all must step aside and allow the elephants to march ahead. There can be no doubt about the directions of the markets when the two behemoths of the banking and the housing sector trend. Wednesday was such a day when the HDFC twins went trending, and they pulled the market upward with their sheer weights in the indices.
After the equity markets were hammered to their lows following massive selloff, it was the HDFC Bank that brought the bulls back in the game. Reliance Industries and the HDFC Bank were the saviours of the equity market, as rally in their scrips brought the much needed stability. Another thumb rule in the market is that traders must quickly adjust to the direction of the movement of the Reliance Industries. And if the Reliance Industries and the HDFC twins work in tandem, bears simply are seen to have no chance to stay in the ring.
In the last five trading sessions, Dow Jones has also gained almost two per cent, while being marginally up in the afternoon trade on Wednesday. Despite the evidences of the US market contracting, the equity markets there have rebounded in hope that the investors may be in the fag end of the inflation tunnel, and the supply side constraints may soon ease. The foreign institutional investors were net buyers in the cash market with a contribution of Rs 806 crores. Their domestic peers, however, had a net sell of Rs 947 crores.
The Adani group of companies remained under pressure for another day on the street, with a few of them staying stuck at the lower circuits. The cement firms, however, ducked the trend.
Larsen and Toubro has been shining ever since the construction behemoth said last month that it would focus on high technology businesses. It again was up by four per cent on Wednesday, resuming its upward journey.
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