Reaction on post RBI policy announcement - Rohit Gadia, CapitalVia Global Research

Mr. Rohit Gadia, Founder & CEO, CapitalVia Global Research Limited post monthly monetary policy announcement.

"RBI first bimonthly monetary policy review for 2016-17 was at par investor's expectations. RBI reduced the Repo rate by 25 basis points to 6.50% from the previous 6.00 %. While Reverse report rate was increased to 6% from 5.75%, also kept CRR and SLR unchanged at 4.00 % and 21.50% respectively. RBI has narrowed the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps by reducing the MSF rate by 75 basis points and increasing the reverse repo rate by 25 basis points, with a view to ensuring finer alignment of the weighted average call rate (WACR) with the repo rate. RBI reduced rate by 25 bp since it was already discounted so market started correcting after being a bit volatile just after the policy announcement. Rate cut will help strengthen activity and give an additional strength to Government initiatives. Technically nifty can surge down till the next major support level of 7600 and if manages to closed below the same on closing basis then may fall further till the next major support level of 7400, while major resistance for Nifty Future will be at 7800".

Source : Equity Bulls

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