What happened with the Share Market Today

Equity benchmark Sensex bounced nearly 1500 from the intra-day low after the Reserve Bank of India raised the benchmark repo rate by 50 basis points, along expected lines and marking the fourth straight increase in the current cycle, in an attempt to tame stubbornly high inflation. Interest-sensitive sectors like financials, auto, realty, and others like cement, metal, and IT stocks led the rally in the domestic bourses amid a strong opening in the European markets along with a smart recovery of the US Dow Future.

Sensex zoomed over 1,000 points to close above the 57,400-level and Nifty recaptured the key 17,000-mark as the market felt the RBI is nearing the end of the rate hike cycle. Sentiment boosted after the RBI retain its inflation target at 6.7% and marginally downgraded on FY23 GDP target to 7% from 7.2% which has been already factored in.

After opening on a sluggish note, Sensex bounced back as soon as the Reserve Bank announced a 50 bps rate hike. Intraday, the Sensex surged over 1,500 points before easing some gains. It finally closed at 57,427, showing a gain of 1,017 points or 1.80 percent. Similarly, the Nifty opened 20 points lower at 16798 but staged a significant recovery towards the late morning session and touched an intra-day high of 17187. NSE finally settled the session 276 points or 1.64 percent higher at 17,094 after a fall of seven trading sessions.

The RBI announced a 50 basis points hike in the repo rate to 5.90%, the highest since April  2019. Reserve Bank of India’s governor projected the GDP growth rate for FY23 at 7%  from the 7.2 percent estimated earlier. RBI retains FY2023 CPI inflation at 6.70%.

Among the global markets, Asian markets declined sharply on account of overnight US stocks plunged 2%, to the lowest since November 2020 on the back of another group of Federal Reserve officials struck a hawkish tone, the concern of German inflation topped 10% (highest since last 70 years) and the UK government’s tax plan continued to weigh on global market sentiment. However, European markets soared 1% in the afternoon sessions and the US Dow Future climbed up by 200 points after the news the UK economy narrowly avoided recession.

Metal stocks witnessed a smart rally after the news that the LME is considering a ban on more Russian commodities(nearly 5% of global output). Nifty metal Index surged over 2%. Hindalco climbed up over 5% to close at Rs391. Both National Aluminum and Vedanta gained 5% and 4% respectively. SAIL, Jindal Steel, Tata Steel, and JSW Steel gained nearly 3% each.

Banking stocks witnessed fresh buying while 10-Year G-Sec Yield gained 6bps to close at 7.39%. Indusind Bank surged 4% to close at Rs1185. Axis Bank advanced 2% to close at Rs733. SBI, ICICI Bank, HDFC Bank, Kotak Bank, HDFC Bank, and PNB gained between 2-5%. NBFC stocks like Bajaj Finance, Bajaj Finserve, and M&M Finance gained between 2-3%.

Both Reliance Industries and Bharti Airtel gained 2% and 5% after the news that Prime Minister Narendra Modi is set to launch 5G services in the country tomorrow during the inauguration of the 6th edition of India Mobile Congress (IMC-2022).

Auto stocks witnessed fresh buying. Auto monthly September sales data will be announced tomorrow. Maruti gained 2% to close at Rs8828. Ashok Leyland, TVS Motor, Tata Motor, M&M, and Eicher Motor gained between 1-2%

Technical Outlook:
The nifty index opened negative and dropped below its previous day’s low to 16747 but witnessed a strong pullback of 440 points. It skyrocketed to 17187 zones and closed with gains of around 275 points. It formed a Bullish Engulfing candle on a daily scale and negated its lower highs formation of the last seven trading sessions. It formed a Hammer candle on a weekly frame and covered most of the losses of its entire fall in the week. Now, it has to hold above 17017 zones for an up move towards 17250 and 17442 zones whereas supports are placed at 16888 and 16750 zones