RBI Policy viewpoint by Epic Research

Indian Stocks remained positive after RBI monetary policy was announced. The markets have been declining after the Union Budget. Market participants were expecting good policy decisions from RBI. Comment on RBI policy by Mr. Mustafa Nadeem, CEO, Epic Research....

This is a welcome move and was pretty much expected on the street. Amid global markets witnessing lower interest rate scenario and dovish policy stands, equities market taking a hit and negative-yielding bonds surging. This is an accommodative stance we believe which RBI did clearly mention in its previous meet. The recent stance of the Fed by reducing the reserve rates and officially labeling China as Currency manipulator amid rising trade war tariffs is what have might be the issue on the table. The monsoon is slowly picking up while inflation remains under control. The headroom space was there and RBI is filling it.

Markets in the short term may rejoice and see some recovery to upper levels of 11100 - 11200 as far as 10750 holds. But it is important to note that we are in a secondary trend which is bearish and the bulls at present have the least chance of turning the trend quickly. Going forward the pressure at higher levels may continue to maintain its bearish momentum It is now how global markets move and what are the cues there. If 10750 is taken out on a closing basis we may see a trend continuation to much deeper levels of 10200 - 10300 but this move may be seen as a short term relief since the market is now dancing to the tunes of the global markets.