It definitely surprised the market as a 50 basis point was not anticipated and now it is going to add further pressure on corporate profitability and overall growth. The policy review by RBI governor D Subbarao is really a hawkish stand by the RBI and we feel that at least one more rate hike going forward will take place as RBI governor D Subbarao is in no mood to stop despite making moderated statements to the media before the hike. This clearly shows that RBI is willing to sacrifice growth to tame inflation. The banking sector will pass on the rate hikes to customers and thus economy will further slow down. We will now see downside risks to growth which will be seen in the latter half of the year. The market is most likely going to trade in a range of 5480-5750 and to take optimum benefit, make use of the hot intraday tips and book profit same day as every drop counts in the ocean.
RBI Update
Continuing its anti-inflationary stance, the Reserve Bank of India (RBI) raised the repo rate by 50 basis points (bps) to 8% from 7.5% and the reverse repo rate was raised from 6.5% to 7%. But the RBI kept the Cash Reserve Ratio (CRR) unchanged. Last time, the Central Bank raised rates by 50 basis points was two months back in May 2011.
Derivative Analysis
A significant increase in OI in the 5,500- strike call options and change of hands in the same strike put options suggests a breakout below 5,500 in the near future. The market picture chart, however, hints at a volume and price-based decline around 5,477. There are only two days remaining for expiry of July series and hence 5,620 is likely to be a resistance level for the market in the near future. MKTP chart hints at volume-based correction tomorrow. Technically market has given a sell signal and we may see some support emanating at 5530 levels.
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Support and Resistances for the Day
| Indices | Support | Resistance |
| Nifty | 5532-5468 | 5625 |
| Sensex | 18437-18223 | 18750 |
Jackpot Tip Profit
| Stock | Profit (Rs) |
| Tip | 940 (Rs 50,000 Trading) |
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Intraday Trading Tips
| Share | Gains (Rs) |
| Tips | 21970 |
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Future and Options Daily Paid Tips
| NSE Nifty 50 Stocks | Made Money (Rs) |
| Tipz | 37680 |
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Strong future shares at National stock exchange
Petronet, Praj Industries, Dish TV, Idea, CESC, Indian Bank, GSPL, Adani enterprises, Oriental Bank & Hexaware.
Weak future stocks at NSE
LITL, GTL Infra, Orchid Chem, KS Oils, NCC, Exide Ind, Educomp, Rolta, GVKPIL & HDIL.
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