Stock Market Today: Rate Cut Hopes Swing Equities from Lows
NSE India Image credit X.com
Equity Markets Witness Major Turnaround with Bottom Buying
By S Jha
New Delhi, January 28: The Stock markets took breather from the liquidity boost by the Reserve Bank of India (RBI). The street buzzed with hope that the RBI may finally cut rates.
Nifty held the support at 22800. The 50-share index opened in a gap up on Tuesday morning. But late session profit booking sent Nifty below 23000.
The Bank Nifty led the bulls’ charge on the street. The RBI’s liquidity measure boosted the confidence on the street.
Market participants are hoping that the RBI may cut the rate in the monthly policy committee meeting in the first week next month.
Also, the market participants are hoping that the Union Budget on Saturday may unveil measures to boost growth. A budget signal with focus on growth may spur the market sentiments, said market participants.
“Nifty Bank led today’s positive market momentum as the likelihood of an RBI rate cut increased after last evening’s liquidity measures. The index gained over 2% intraday following a gap-up opening, but profit booking occurred in the last half hour, closing below 49000,” said StockEdge in a post-market note.
The Indian equities have been mauled with sharp selloff by the foreign investors. They have pulled out almost $7.5 billion in recent months.
“Escalating conflicts in regions like the Middle East have contributed to global market instability. For example, the Iran-Israel conflict has led to increased oil prices and heightened investor caution, adversely affecting markets worldwide,” said 5paisa in a note on stock market crash.
‘Trend India Now’ in a note stated that “the Securities and Exchange Board of India’s (SEBI) recent tightening of regulations on equity derivatives trading has introduced additional challenges for traders, contributing to market uncertainty and selling pressure”.
“My personal opinion is that strong dollor is the reason for this drop. FIIs are pulling out as rupees may drop further so as other currencies. They have to come back anyways,” said a market participant.
The Midcap index did a swing of over 500 points on Tuesday. There was an all-round pullback in the broader market.
But the market participants are still cautious. They argued that the stock market will stay volatile in the near future.
The banking and realty indices on Tuesday led the bulls back on the street. Both the indices had suffered the most in the recent selloff in the market.
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