The Nifty 50 Index rose and is hovering near its record high, while Indian bond yields rallied after a major statement from the Reserve Bank of India (RBI). It has jumped by 10.9% this year and by 20% from its lowest point this year.
RBI launches “shock-and-awe” plan
The blue-chip Nifty 50 Index rose after the RBI launched the “shock-and-awe” approach to boost liquidity in the financial system. Similarly, the country’s bond market continued doing well, with the ten-year yield dropping to 6.57% from this week’s high of 6.70%.
The shorter-term 5-year yield dropped to 6.353% from its weekly high of 6.47%. At the same time, the Indian rupee softened a bit, with the USD/INR pair rising to 89.6850 from this week’s low of 89.27.
This price action happened after the RBI announced that it will buy 2 billion rupees or $22 billion of bonds in four tranches this month and in January. It will also hold a $10 billion foreign exchange currency swap in January this year.
These actions are a continuation of the measures announced earlier this month. The bank hopes that they will help to offset the cash drain that happened recently when it moved to support the currency. That move led to a dip in system liquidity, with the bank deficit rising to 727 billion rupees.
The Nifty 50 Index reacted to a court ruling in the United States that upheld Donald Trump’s decision to boost the H1-B visa fee to $100,000 a move that will affect India. India has a 70% market share of the Visa program, with companies like Tata Consultancy, Wipro, and Infosys having a big market share.
A major issue for the Nifty 50 Index this year has been the ongoing trade conflict between India and the United States. Trump has applied a 50% tariff on all goods from India, a move that has affected many constituent companies. These tariffs have contributed to its underperformance compared to other global indices like the TSX Composite and the S&P 500 Index.
Top gainers and laggards among Indian stocks this year
Most companies in the Nifty 50 Index were in the green, although gains were less pronounced than in other global indices.
The top gainers in the index were companies like Shriram Finance, Maruti Suzuki, Bajaj Finance, Eicher Motors, SBI Life Insurance, and Hindalco Industries. All these stocks soared by over 44% this year, helped by their domestic focus and strong financial results.
On the other hand, the top laggards in the Nifty 50 Index were companies like Trent, Tata Motors, Tata Consultancy, Power Grid, Infosys, ITC, and Wipro. Tata Motors shares dropped because of a major hack that stalled its Jaguar Land Rover business.
Consulting companies like TCS, Infosys, and Wipro stocks have dropped because of the H1-B visa program.
Nifty 50 Index technical analysis
The daily chart shows that the Nifty 50 Index has done well in the past few months and is now hovering near the year-to-date high of ₹26,317. It has formed an ascending channel and is nearing the upper side.
The index has remained above the 50-day and 100-day moving averages. It is also above the Supertrend indicator and the Ichimoku cloud.
Therefore, the Nifty 50 Index will likely continue rising as bulls target the next key resistance at ₹26,400.
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