The Reserve Bank of India has unchanged the Repo Rate at its meeting on 6th December, slashed the Cash Reserve Ratio(CRR) by 50 basis points paying way to a liquidity of 1.16lakh crores into Banking System.RBI Monetary policy committee(MPC) has decided with a majority vote of 4:2 to maintain the Repo rate unchanged.
KEY CONCERNS: SLOWDOWN IN GDP, INFLATING INFLATION.
RBI has majorly focused on maintaining the Consumer price index(CPI) inflation of 4(+or -2 percent).There was a gradual increase in October inflation above 6.2 percent much higher then September inflation data.The major issue was with GDP growth which has de-accelerated to 5 4 percent compared to 8.1 percent in previous quarter.
With increase in inflation forecast, RBI governor has hinted that they are not expecting a 50 basis points cut in Repo rate in 2025.
CHANGE IN DYNAMICS:
Despite the inflation and GDP growth concerns,there are laggards which market is watching keenly.
FII BUYING TRACTIONS :
After 2 Consecutive months of continuous selling, FII’s turned net positive for the month of December.During the month of October and November, they have sold approx. 1.5lakh crores of stocks.
Investors are expecting the buying traction will continue throughout the Holiday Month.
NIFTY TECHNICALS :
Nifty 50 is trading above 50 ema on a daily chart,which resembles the buying opportunity in the near term.
IPO RALLY :
In the Consecutive weeks,there are bunch of IPO’s lined up for the entry into the Market.Recently,LG electronics has applied for 1.8bn dollars IPO.
After a consolidation of more than 10 percent from recent highs,nifty 50 is looking for buying traction.