Markets monitor RBI MPC meet; rupee downtrend likely to continue
Sep 25, 2022
New Delhi [India], September 25 : Markets fell for a second consecutive week while rupee's decline versus dollar put pressure to reverse the positive flows into the domestic market for two months. US Federal Reserve's hiked rates and a tighter monetary policy across central banks across the world hinted investors for the sell-off. Markets started the week on a mild note, taking cues from the weak global markets.
Weakness in the global markets eventually dragged the indices lower by the weekend. Nifty witnessed two consecutive days of positive closure and the benchmark index witnessed a correction consecutively for the second week and ended the session a tad higher than 17300, with 1.16 per cent lower over the previous week's close.
The RBI Monetary Policy Committee meet during September 28-30 will be thoroughly watched by stakeholders as markets anticipate a 50-basis points (bps) increase in the repo rate. Foreign forex reserves, which fell 14% from the peak, will also keep the markets on edge.
HDFC Securities Head of Retail Research Deepak Jasani said: "FIIs (foreign institutional investors) were net sellers of Rs 4,362 crore in the equity markets and DIIs (domestic institutional investors) were net buyers of Rs 1,138 crore. The Indian 10-year G-Sec (government securities) yield increased by 13 bps to 7.39%. The Indian rupee depreciated by 110 paise to close at 80.92 per USD (US dollar)."
Jateen Trivedi, VP research analyst at LKP Securities, said "Rupee downtrend will continue as long as positive triggers are not witnessed from the inflation forefront. The next trigger for rupee next week is RBI policy which shall provide some respite to rupee fall."
The much-anticipated growth figures of the US GDP are keenly watched by the global markets. The second-quarter GDP growth was reported to have decreased by 0.6 per cent, which came in as a positive from a sharp decline of 1.6 per cent in the first quarter.
Apurva Sheth, head of market perspectives, Samco Securities, said: "Since the recent highs, there has been a considerable drop, and it appears that bears could drag the index (Nifty) even further. Immediate support is now placed around 17,200 and 17,000 levels. If the index breaks this level, then we could see it drag lower to 16,600. On the upside 17,500 could act as a resistance."
Osho Krishan, senior analyst of technical & derivative research, Angel One, wrote in his weekly wrap-up: "Considering the recent price action, traders are advised not to carry aggressive overnight bets for a while and should adapt the strategy to follow one step at a time and respect levels on either side. The unfavourable global scenario was one of the major catalysts for the fall in the week; hence, one should stay abreast with global developments and the upcoming key domestic macro data."
