RBI cuts SLR by 50 basis points to provide liquidity – No Rate Cuts
The Reserve Bank maintained the benchmark repurchase rate at 7.75 per cent, while leaving broad hints that future cuts will depend on the fiscal consolidation path and the inflation data ahead before taking any rate cuts. The RBI did cutSLR by 50 bps to 21.5% to provide liquidity.
Even though just 15 days before there was a rate cut of 25 bps which pushed Nifty to life time highs of 8996, there was a hope of rate cut today as well which were dashed by RBI and markets reacted negatively or we say profit booking. After rise in NPA’s of 3 major banks, bank nifty remain under selling pressure.
A trend line resistance at 8900 for Nifty was a major hurdle and a harmonic bearish butterfly pattern is now showing that there will be further weakness ahead in Nifty.
Nifty’s support is now at 8627 and we believe Nifty might even slip below 8446 till 8200 within next 2 weeks.