RBI has announced policy decision in order to improve liquidity and to help the banking & financial services sector. Stock markets have suffered massively in short term due to coronavirus and stability is required for markets to move into trading zone.

Comments on RBI policy by Mr. Amit Gupta, Co-Founder & CEO, TradingBells follow....

RBI comes out with lots of measures to ensure the stability of the financial system and inject liquidity in the market amid ongoing turmoil of pandemic. Banks are being motivated to lend by the cut in both Repo rate and CRR, where LTRO money should be invested in commercial papers by banks and that will be considered as a held to maturity, therefore, there will be no issue of MTM losses. So we should expect lower yields in the corporate bond market, therefore, the bond market should rejoice to RBI policy.

Three months moratorium on all term loans is another relief for all including NBFCs, Banks, Corporate and the general public. It is a very good policy to cheer the market but the problem is that the market has already rallied too much from lower levels ahead of policy and real trend decider for the market will be the trend in new cases of Covid-19 globally and locally.

Technically, 9000 is a key psychological resistance where sellers are becoming aggressive therefore Nifty needs to sustain above 9000 mark for further strength otherwise we may see selling pressure towards 8450; below this we can expect further pressure towards the sacrosanct support of 8000 while if Nifty manages to sustain above 9000 mark then we can expect a rally towards 9600-9900 zone.