Markets may open cautiously awaiting RBI policy on rate

The markets are likely to start on a cautious note amid muted global cues. Traders will remain watchful ahead of outcome of Reserve Bank of India’s (RBI) policy review meeting. Economists are equally divided on the outcome of the meeting. While half of the economists are betting on a 25 bps rate hike, the other half believes that the RBI may signal a hawkish note and wait till August to hike rates after monsoon data is clearer. The trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty may open with modest losses of 13 points around levels of 10,594. 

Majority of the Asian stocks are trading slightly higher on Wednesday, with Japan’s Nikkei 225 inching higher by 0.21% and Hong Kong’s Hang Seng advancing 0.50%, whereas the Shanghai Composite has lost 0.23%.   

Back home, markets extend losses for the third day in a row on Tuesday, but well of their worst levels of the session. The BSE Sensex slipped below the important psychological level of 35,000 and the Nifty closed below the 10,600-mark. The broader markets received a thrashing once again, as the Nifty Mid-cap and Small-cap indices lost 1.3% and 2.5%, respectively. On the sectoral front, Nifty Financial Services was the only sector that ended in the green, while Nifty Media (2.06%) and Nifty IT (1.37%) succumbed to selling pressure.   

On the Wall Street, majority of the stock indices ended higher on Tuesday, with the tech-heavy Nasdaq Composite notching a record for the second day in a row on the back of rally in the large technology stock. However, the Dow lagged and ended down by 14 points to close at 24,800. Meanwhile, the S&P 500 index added 2 points to end at 2,749, while the Nasdaq Composite index advanced 31 points to finish at 7,638.  

Majority of European markets ended Tuesday’s session in the red terrain. The banking stocks were the worst performers led by the Royal Bank of Scotland, which plunged more than 5 per cent following news that the UK government would reduce its holding in the bank. The DAX of Germany added 0.13%; but the CAC 40 of France shed 0.22% and the FTSE 100 of UK finished lower by 0.70%.