The markets shows strength after RBI hike rates
RBI hikes interest rates by 25 bps to 5.5% sighting inflation risks, Nifty trades above 22600.
As of 10:51 IST, 7 Oct
As highlighted in yesterday's report, the hourly trend-line breakout at 22,600 opened the door for a corrective bounce towards 23,000-23,100. Sustaining above 22,600 remains important for the bounce to continue.
The market is likely to continue this corrective bounce unless 22,500 is breached. A break below 22,500 would invalidate the bounce setup and bring back selling pressure.
RBI has raised the repo rate by 25 bps to 5.50%, lowered Real GDP growth forecast slightly to 7.1% from 7.3%, changing stance to calibrated tightening citing inflation risks, elevated crude and rupee weakness due to global geo-political concerns. Rate-sensitive sectors may see volatility; but likely to see past the hikes to festive season.
Momentum plot for NSE200 shows slightly positive bias supporting our market analysis for a corrective bounce to 23000-23100 levels with a improving breadth.
Tradzo Research
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