Nifty hits fresh record high, nears 9,700 ahead of RBI policy meet

The broader market outperformed the frontline indices

The benchmark indices were trading flat on Monday as investors stayed cautious ahead of the Reserve Bank of India (RBI)'s monetary policy meet which begins tomorrow, while investors also took cues from the GST Council meet held on saturday, where it cleared the pending rules and decided the rates of tax and cess on the remaining items.

At 10:49 am, the S&P BSE Sensex was trading at 31,280, up 7 points, while the broader Nifty50 was ruling at 9,666, up 13 points. 

The S&P BSE Midcap and the S&P BSE Smallcap indices outperformed by rising 0.4% and 0.6%, respectively.

"Oscillators suggest that the trend is a bit tired, but there are not enough signs that a major fall is in order. However, 9,640 may be threatened, a break of which, though may only spark volatility, could attract bargain hunting, and prepare a platform for the next swing higher. Alternatively, dirct fall below 9,530/9,500 could however, alter the positive expectations," said brokerage Geojit Financial Services in a technical note.

Buzzing stocks
 
Babaj Auto (up 2.4%), ONGC (up 1.5%) and Adani Ports (up 1.4%) were the top gainers on the Sensex, while ITC, Lupin and Coal India shed up to 1%.  

Shares of jewellery companies rallied by up to 15% on the BSE after the Goods and Services Tax (GST) Council fixed GST rate on gold, gems and jewellery at 3%.

Titan Company, PC Jeweller, Gitanjali Gems, Tribhovandas Bhimji Zaveri (TBZ), Tara Jewels, Thangamayil Jewellery and Renaissance Jewellery were up in the range of 2-15%. Titan Company, the largest gainer among the pack, rallied to its record high of Rs 543, up 15% on the National Stock Exchange (NSE).

North Eastern Carrying Corporation (NECC) hit its upper circuit of Rs 50.35, up 10% on the BSE after the logistics firm embarked on an expansion drive with plans to double its reach to 500 locations across India in the next three to four years to tap opportunities after GST implementation.
 

GST rates fixed

The Goods and Services Tax (GST) Council on Saturday fixed the rates for almost all the remaining items, such as precious metals (gold and silver), diamonds, biscuits, textiles, and footwear. 

Now, the new indirect tax regime is most likely to be rolled out on July 1, despite reservations voiced by West Bengal. All other states have agreed to the timeline. 

RBI to maintain status quo

Economists don’t expect the six-member Monetary Policy Committee (MPC) to tinker with policy rates of the Reserve Bank of India (RBI) when it meets on Tuesday. Twelve economists polled by Business Standard ruled out a rate cut by the central bank even as growth numbers slowed down and inflation surprised most on the downside. The MPC's meeting will conclude on Wednesday. 

US job growth slows 

US job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3%. Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labor Department said on Friday. 

Despite the disappointing data, market participants still largely anticipate the Federal Reserve to raise rates at its June 13-14 meeting, with traders expecting a 90.7% chance of a quarter-point hike in its June policy meet, according to Thomson Reuters data.

Global markets

Asian markets were trading mixed after the latest terror attacks in London that left the pound slightly weaker. The Japan's Nikkei erased early losses to trade 0.1% higher, while South Korea's Kospi index rose 0.2%.

The ASX 200 was down 0.74%, while China's Shanghai Composite shed 0.5% despite the positive read from the May Caixin services PMI. The Hang Seng Index was also down 0.18%, however, the Shenzhen Composite added 0.6%.

On Friday, Wall Street ended at record levels for second consecutive seesion. 

The Dow Jones Industrial Average rose 62.11 points, or 0.29% to 21,206.29, the S&P 500 gained 9.01 points, or 0.37% to 2,439.07 and the Nasdaq Composite added 58.97 points, or 0.94% to 6,305.80.

(With inputs from Reuters)