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Nifty snaps 4-day gaining streak after RBI policy decision

08 Jun 2023 Evaluate

Indian equity benchmark -- Nifty -- ended Thursday’s trading session on a lower note dragged by auto and consumer stocks. After making a cautious start, soon index traded in a positive terrain, as traders got encouragement with a private report stating that Consumer price inflation in India likely cooled to a 20-month low in May as food price rises slowed further, drawing closer to the Reserve Bank of India's medium-term target of 4%. Food inflation, which accounts for nearly half of the consumer price index (CPI) basket, eased to 3.84% in April and was expected to have declined further last month.

In afternoon session, index cut all of its gains and entered into a red terrain, even after the Reserve Bank of India (RBI), in its second bi-monthly policy for FY24, has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for second time in a row. Traders took a note of a private report stating that India's currency in circulation dropped for a second consecutive week after the central bank withdrew the country's highest value currency note in May, advising people to deposit those with various banks and hoping to help lender deposits in the process. At the end, index slipped further near day’s low point and closed with losses of 91.85 points.

Most of the sectorial indices ended in red except Metal. The top gainers from the F&O segment were Dixon Technologies (India), NTPC and JSW Steel. On the other hand, the top losers were Indian Energy Exchange, Vodafone Idea and Indian Hotels Company. In the index option segment, maximum OI continues to be seen in the 18900 - 19100 calls and 17900 - 18100 puts indicating this is the trading range expectation.

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