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Nifty ends 3-day losing streak ahead of RBI interest rate decision

07 Aug 2024 Evaluate

Indian equity benchmark -- Nifty -- ended Wednesday’s trading session near intraday high point amid Reserve Bank of India’s (RBI) interest rate decision due on Thursday. Index made gap up opening, as traders took some support with a Labour Ministry report showing that retail inflation for industrial workers slipped to 3.67 per cent in June from 3.86 per cent in the previous month this year mainly due to lower prices of certain food items. It said year-on-year inflation for the month of June 2024 moderated to 3.67 per cent as compared to 5.57 per cent in June 2023. Traders took note of S&P Global Ratings’ statement that India stands out both on growth and external fronts amongst the South Asian countries and the trajectory of government's fiscal deficit will decide on the direction of sovereign ratings.

In afternoon session, index continued to trade in positive terrain and remained higher till the end of session, as sentiments remained upbeat with private report stating that India's central bank could cut interest rates by 100 basis points in a monetary easing cycle that is likely to start in December as inflation eases towards its 4% target. Some support also came as the government has approved the continuation of interest subvention scheme for short-term loans of up to Rs 3 lakh for agriculture and allied activities availed through Kisan Credit Card (KCC) during the current financial year. Under the scheme, farmers get loan at a concessional interest rate of 7 per cent. An additional interest subvention of 3 per cent per annum is provided to farmers who repay loans in time.

All the sectorial indices ended in green. The top gainers from the F&O segment were Oil and Natural Gas Corporation, Coal India and Bharat Heavy Electricals. On the other hand, the top losers Shree Cement, Bata India and Indusind Bank. In the index option segment, maximum OI continues to be seen in the 24900 - 25100 calls and 23900 - 24100 puts indicating this is the trading range expectation.

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