Nifty undecided, Eye on Monetary Policy - Consortium

The main Indian stock indices continue to consolidate in a rangebound fashion amid lack of fresh catalysts and part profit booking following a three-month rally. Sentiment was also a little subdued owing to caution ahead of Tuesday's RBI policy decision. A mixed trend in the global markets, coupled with the Government's move to scale back its FY13 GDP growth forecast also weighed on investors' morale today.

Coming to tomorrow's RBI policy meet, the central bank is widely expected to leave the repo rate unchanged but it could lower the CRR by 25 bps to ease the tight liquidity condition. Although headline WPI inflation and core inflation have come down in November, the RBI is likely to wait for one more month's inflation numbers before jumping the gun on the repo rate. A rate cut can be expected in the January policy meeting of the RBI.

The market is likely to remain in a wait-and-watch mode till that time. The Sensex fell by 0.38%, while the NSE Nifty lost 0.37%. On the technical front, Nifty has been moving undecided for the past few trading sessions and looking for some catalysts.

Nifty has bounced back twice from the level of 5838 making it as a strong support level. If this levels get breached, nifty may fall sharply. On the upside also there are quite a few resistances, the first one at 5786 and then near 5886. Long positions may be created if nifty trades above 5886.

Source : Equity Bulls

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