Bank Nifty Fut(Feb): Expect Some Support Around 15300-200 Zone On The RBI Day

Sustaining above 15300, BNF may rally up to 15685-795;

But, in the near term, it need to stay above 15795-845 for any further meaningful rally;

Otherwise, may fall towards 14730-690

Although, its virtually zero probability for any RBI surprise today, 

Still he is "Raghu Ram Rajan" and "he do what's he likes to do" !!! 

Trading Levels:BNF-Feb

LTP: 15354

SL=+/-	25 POINTS	FROM	SLR
For	Intraday Swing	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	15275		15390-425	15485-525	15585-685*	15725-795*	15845-945	<15225
Weak <	15225		15160-050	14985-865	14715-690*	14635-615	14550-415	>15275
FOR	Conservative	Positional	Trader
			T1	T2	T3	T4	T5	SLR
Strong >	15275		15425	15525	15685*	15795*	15945	<15225
Weak <	15225		15050	14865	14690*	14615	14415	>15275

Apart from global cues, all eyes will be on RBI today for any surprise and the overall commentary tone (dovish/hawkish).

Although there is very little probability for any rate cut (@0.25%) today, there are some market buzz that Rajan may surprise again today to complete the full rate cut cycle by 150 bps to 6.50% as Jan'16 inflation (CPI) is well within below 6% target range of RBI and now stands around 5.73%.

But majority of the analysts feel that RBI may take "wait & watch" policy with some dovish stance and cautious tone about the ongoing global market turmoil & currency wars with emphasis more on structural reforms rather than monetary stimulus (QQE).

RBI may like to keep real rate of interest at 1.5-2.00% and if the average CPI will be around 4-5% for 2016, then the targeted repo rate may be kept around 6.00-6.75% in FY-17.  

In all probability, RBI may not act today, because it will like to see the actual budget & fiscal deficit guidance, previous rate cut transmissions cycle by the banks and FED stance in March'16 meeting. Also in the last few months, inflation (both WPI & CPI) begin to march upwards, which may cause some hawkishness on the part of the RBI Gov, who is a known "inflation warrior".

 

Depending upon the budget cues and fiscal discipline road map and FED stance, RBI may act by cutting 0.25% in an out of policy day (Again Holy Gift to the nation ??) or in the April meet.

If FED indicate that it will be in no hurry for successive hikes as par the  dot-plots and may opt for only one hike @0.25% in Dec'16, then RBI may cut by total 0.50-0.75% in FY-17 to keep the USDINR interest differential and other monetary aspects in balance. 

But proper full transmissions by the banks are necessary to help in the expected economic recovery. Again, with the current RBI directives about disclosure of stressed assets and clean the balance sheets may continue to put pressure on the banks in the days ahead and with the current state of huge NPA, banks may show some unwillingness to pass on the full RBI rate cut to the borrowers.

Banks (BNF) has a significant weightage in our market and unless they recover, it may be quite hard for the overall market (Nifty) for any significant sustainable rally in the months ahead.

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