Indian stock indices off peak on mild profit booking

NEW DELHI: Indian stock market indices traded on a cautious note Tuesday, influenced by mixed cues from global markets, and settled marginally in the red.

At the closing, bell, Sensex settled at 73,904 points, down 110 points or 0.15 per cent and Nifty settled at 22,453 points, down just 9 points or 0.039 per cent.

On Monday, they hit their all-time highs -- 74,254.62 points and 22,529.95 points, respectively.

"After the strong move seen in the previous session, we expect the market to consolidate over the next few days keeping various key events in mind," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

According to Ajit Mishra, SVP - Technical Research, Religare Broking Ltd, "It's a healthy pause around the record high, which may extend for couple of sessions. We needs participation from the heavyweights, especially banking majors to trigger the next leg of upmove in the index. Meanwhile, the buoyancy in the broader market is encouraging but traders should stay selective and maintain a "buy on dips' approach."

Indian stock market indices closed the financial year 2023-24 on a firm note, with Sensex and Nifty rising in the range of 27-31 per cent, backed by firm economic growth forecasts by various global watchdogs and political stability at the federal level.

Foreign portfolio investors continuing to remain net buyers in India also buoyed the domestic stocks. Foreign portfolio investors, who had aggressively sold Indian stocks and turned net sellers in the Indian equity market in January 2024, became net buyers in February and March.

In March, they bought stocks in India worth Rs 35,098 crore, the latest data from the National Securities Depository Limited (NSDL) showed. On April 1, they bought stocks worth Rs 2,355 crore.

Going ahead into this week, investors will closely monitor the RBI monetary policy meeting starting Wednesday, with the outcome to be pronounced on Friday morning.

The RBI typically conducts six bi-monthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators.

The Monetary Policy Committee of the Reserve Bank of India (RBI) in its February review meeting unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, thus maintaining the status quo for the sixth straight time.

The repo rate is the rate of interest at which RBI lends to other banks.

Deliberating the policy statement, RBI Governor Shaktikanta Das had attributed comfortable inflation and firm growth dynamics as the reasons behind maintaining the status quo in the policy stance.

Retail inflation in India is in RBI's two-six per cent comfort level but is above the ideal 4 per cent scenario. In February, it was 5.09 per cent.

According to SBI Research, the Reserve Bank of India (RBI) might initiate a rate cut cycle in the third quarter of current financial year 2024-25.

"The domestic market took a breather today after achieving a fresh record high yesterday. Factors such as a rising dollar, increasing US bond yields, and a notable uptick in crude oil prices collectively dampened investor sentiment...Investors are eagerly anticipating guidance from the upcoming RBI monetary policy announcement for insight into near-term market direction," said Vinod Nair, Head of Research, Geojit Financial Services.