In a surprise move Reserve Bank of India (RBI) tried to give a boost to the Indian economy by slashing the repo rate by 50 basis points. This is what we call as Jaroorat Se Jyada Offer.
The move has been welcomed by the market. However the movement has been lackluster and Nifty has barely managed to remain above its short-term moving average. Thus ideal is to trade in hot stock of the day and mint money like professional day traders. It is very important that Nifty sustains above 5240 level as any break of this level is a first indicator that we are heading for 5200-5100 levels. However for the short term if Nifty sustains above 5240 level, than we see Nifty facing resistance at 5340- 5375 level. As a free advice; Safe traders can exit long positions when Nifty breaks 5260 level; however those willing to take some risk can wait till Nifty breaking 5240 level.
The key points of monetary policy released by RBI are as following:
- Slashed repo rate by 50 basis points to 8 per cent.
- Reverse repo is further adjusted by 100 basis points to 7 per cent.
- Cash reserve ratio (CRR) i.e. deposits which banks are required to keep
with the central bank remains unchanged at 4.75 per cent.
- RBI also raised the borrowing limit of scheduled commercial banks under the marginal standing facility from 1 per cent to 2 per cent of their net demand and the time liability (NDTL).
- Further rate cuts may not occur in near future.
Implications of Recent RBI Policy Update
- If you are looking for a home loan, than wait for few days as rate of interest will come down.
- If you have spare cash and want to invest in a fixed deposit with a bank, than just rush as presently deal is going to be sweeter as banks will reduce the rate of interest on fixed deposits.
The overall market breadth was positive as 1,663 stocks advanced against 1,160 declining ones, on the BSE.
Support and Resistances for the Day
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Strong future shares at National stock exchange
VIP Ind, Yes Bank, MC Dowell, Voltas, Jet Airways, Tech M, Apollo Tyre, Max India, Sobha & Bata India.
Weak future stocks at NSE
Infy, GSPL, Opto Circuit, BEML, Suzlon, Mphasis, Sun TV, TCS, Rel Capital & Praj Ind.
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