Domestic benchmarks Sensex and Nifty turned cautious ahead of the RBI monetary policy meet outcome and ended marginally lower on Wednesday, despite positive global equities. While Sensex ended 24 points lower at 37,663 and Nifty gained 6 points to 11,101. Yesterday, Sensex ended 748 points higher at 37,687 and Nifty gained 211 points to 11,102.
Axis Bank, followed by IndusInd Bank, UltraTech Cement, Tata Steel, Bajaj Finance, SBI, Bajaj Finserv, ICICI Bank, Axis Bank and Reliance Industries were the top gainers. On the other hand, PowerGrid and Nestle India were among the laggards.
Financial, pharma, FMCG and PSU Banks' stocks ended in red territory. All the other sectors ended in the green, with almost 4% rise in the metal index and a 1.8% rise in the auto index.
Today's volatile trade in the domestic equity market was despite strong global equities that trade bullish on hopes of US-China trade talks meet scheduled on August 15 and on the progress in the economic aid package in the US.
Analysts said investors took a cautious stance and booked profits as they are keeping an eye on whether RBI extends moratorium beyond August 2020. The Monetary Policy Committee will announce its policy stance on August 6, 2020.
Vinod Nair, Head of Research at Geojit Financial Services said," Benchmark indices were volatile in trade before closing flat with a positive bias. Global cues were also positive while gold again jumped to record highs. Positive earnings reports are driving stocks and markets around the world, and the same trend is visible in the Indian markets too. Liquidity is a major driver for the markets and it is chasing companies which are declaring stable earnings or outlook. Uncertainties remain while in the near term markets will look forward to the commentary and RBI actions at the end of the MPC meeting tomorrow."
Ajit Mishra, VP - Research, Religare Broking said," Participants are keeping a close eye on RBI monetary policy outcome which is scheduled tomorrow and that would set the tone for the rest of the day as well. While the expectations are mixed on key rates, we feel commentary on the moratorium and future outlook would hold importance. We would suggest maintaining extra caution before the event and advise preferring hedged bets."
Meanwhile, Cadila, DLF, Canara Bank, Adani Gas, Apollo Tyres, Inox Leisure, Strides Pharma, Godrej Properties, Jyothy Labs, VIP among others will announce their April- June quarter earnings today.
On Nifty's technical indicator, Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said," The Nifty failed to close above 11200 and hence the short term bearish trend continues. On the other hand, we did not break 11000 either so we might be rangebound for a couple of sessions. If we can break 11000 we could see 10700-10800."
Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking said," The Nifty took a complete nosedive not only to wipe off losses but also to sneak inside the negative terrain. Now as far as levels are concerned, 11020 followed by 10900 remains to be an immediate support zone and on the upside, 11160-11235 are the levels to watch out for. As of now, there is no hint of the market experiencing a big bang move on the policy day but in case if it happens, then a directional move is possible only outside the range of 11235 -10900."
On the currency front, the Indian rupee closed stronger at 74.94 per dollar as against the earlier close of 75.05 per dollar today.
Amid weak domestic investor sentiments, benchmark indices erased early gains and turned volatile by the first hour of trade today.
Asian equities, barring Nikkei were trading higher today, global investors counted on a fresh COVID-19 stimulus in the United States.Wall Street ended higher after a choppy session on Tuesday. White House negotiators late Tuesday vowed to work 'around the clock' to reach a spending deal by the end of the week, but the Treasury Secretary warned they were not 'going anywhere close' to the $3.4 trillion Democratic leaders sought. Europe trading exchanges, barring Germany's DAX also closed on a positive note yesterday.