The decline in benchmark indices Nifty-50 and Sensex for the last two days came to an end on Tuesday. The reason for this is the bounce in banking shares, which climbed from the steps of the Reserve Bank of India on cash. The Sensex finished trading at 75,901 with a gain of 535 points. The Nifty stays at 22,957 with an increase of 128 points. The indices saw a rise of up to 1.5 per cent during the business session.
In order to deal with the strict cash situation in the banking system, the RBI on Monday announced the strategy steps, which raised the expectation of interest rates in February.
MK Global Financial Services said in a note that cash of Rs 60,000 crore from RBI shows a strong intention. However, it covers only 20 percent of the current shortage of cash of Rs 2.9 lakh crore. Changes in cash cycles are strong incentives for domestic equity and bets on BFSI are the best way. Along with this, other positive things like evaluation etc. are now more appropriate.
On Tuesday, Bajaj Finance, Axis Bank, Bajaj Finserv and HDFC Bank were the leading shares of Nifty-50 and Sensex. Bluechip stocks rose while the shares continued to sell from foreign portfolio investors. According to temporary data from the exchanges, FPIs sold Rs 4,920 crore and their selling has increased to Rs 71,105 crore this month.
However, the selling pressure continued in broad markets and the Nifty Midcap 100 declined by 0.5 per cent, while the Nifty Smallcap 100 weakened by 1.8 per cent. Both index are now about 15 per cent below their highest level.
In recent weeks, uncertainty over the business policies of the business policies of US President Donald Trump and the potential impact of the chat GPT competitive China has still remained a possible impact. Shares of AI -run electronics manufacturing services firms such as Dixon Technologies, Keyins Technologies, Netwab Technologies and MIC Electronics fell by 10 per cent. Talking about different areas, the drug sector suffered the most shock. The Nifty Pharma Index was in red mark in the third consecutive trading session and declined by 2.3 per cent on Tuesday.
Analysts hope that the market will remain limited this week. Siddharth Khemka, head of research head of Motilal Oswal Financial Services, said that investors on Wednesday will monitor some major companies that announce the results such as Bajaj Finance, Maruti Suzuki, Tata Motors, Adani Power’s quarterly figures and future estimates. It is expected that the market will trade within a limited range before the US Federal Reserve on the interest rate of the Federal Reserve and the Union Budget announcement on Saturday.
Even after the latest improvement, the benchmark Nifty is 2.9 per cent below this month so far this month. According to Reuters, the fourth consecutive quarter of the benchmark index will be the longest series of monthly decline in 23 years.