Sensex holds 52,000 in volatile session after RBI leaves key rates unchanged

The market ended lower in a highly volatile session on June 4 after the Reserve Bank of India (RBI) left key rates unchanged and reiterated its commitment to an accommodative stance at it bi-monthly policy review.

The RBI’s monetary policy committee kept the repo and reverse repo rates unchanged at 4 percent and 3.35 percent, respectively, the sixth consecutive time rates were held steady. The MPC also lowered the economic growth forecast for FY22 to 9.5 percent from 10.5 percent.

At close, the Sensex was down 132.38 points or 0.25 percent at 52,100.05 and the Nifty was down 20.10 points, or 0.13 percent, at 15,670.30.

For the week, the Sensex and the Nifty rose over 1 percent each.

“As markets warmed up to (Joe) Biden’s tax proposal amidst encouraging payroll data, all eyes were set on the RBI policy today morning, which, as expected, held status quo and maintained its accommodative stance. The Sensex, however, flirted around the 52k mark even as the broader market witnessed selective buying interest in Unlock Themes with several states beginning to ease restrictions,” said S Ranganathan, Head of Research at LKP securities.

“Housing & micro finance entities were seen buzzing around amidst hectic activity in today’s trade,” he added.

Except bank and FMCG, all sectoral indices ended higher, with the metal index rising more than a percent. BSE midcap and smallcap indices rose over 0.5 percent each.

Nestle, HDFC Bank, SBI, Axis Bank and ICICI Bank were among the major losers on the Nifty, while gainers included Tata Motors, Grasim Industries, Bajaj Finserv, Coal India and ONGC.

Stocks & sectors

On BSE, oil & gas and capital goods sectors rose 1 percent each, while some selling seen in banking, FMCG and healthcare stocks.

Among individual stocks, a volume spike of more than 100 percent was seen in IndusInd Bank, Titan and Tata Chemicals.

Long buildup was seen in Indiabulls Housing, Bharat Forge and BHEL, while short buildup was seen in RBL Bank, Indraprastha Gas and Trent.

More than 400 stocks, including Siemens, Titan, Jindal Saw and NIIT, hit a fresh 52-week high on the BSE.

Technical View

The Nifty formed a small bearish candle on daily scale and a bullish candle with higher highs on the weekly scale. It continues its higher highs–higher lows formation of the last four weeks.

“The Nifty has to hold above 15,600 zones to witness an up move towards fresh life time high of 15,800 and 16,000 zones, while on the downside, support exists at 15,550 and 15,431 zones,” said Chandan Taparia of Motilal Oswal Financial Services.