Markets start soft, all eyes on RBI monetary policy

Despite the positive global cues, the SGX Nifty is indicating a soft start for the domestic benchmark indices. This start could be attributed to the nervousness of market participants ahead of the key announcement on rate cuts by RBI, due later in the day. The RBI monetary policy committee is expected to cut interest rates for the sixth time straight. We believe a rate cut of 25bps is on cards, in line with the consensus. The monetary policy committee might also cut India’s GDP forecast. At the time of writing, SGX Nifty was down by 23 points, trading at 12,071 levels.
 
The Asian markets are mostly trading higher on Thursday following positive cues overnight from Wall Street. China’s Shanghai Composite has surged 0.69 per cent, the Japanese Nikkei was up by 0.65 per cent, and Hong Kong’s Hang Seng has advanced by 0.58 per cent.
 
Back home, the volatility was the buzzword on D-Street in Wednesday’s session as key benchmark indices swung in both directions but, thanks to broad-based buying towards at the fag end of the trading session, the market ended in the green. The Nifty ended up by 0.41 per cent at 12,043 levels and the BSE Sensex rose 0.43 to settle at 40,850 levels. In the broader markets, Nifty Midcap and Nifty Smallcap advanced 0.55 and 0.39 per cent, respectively. On the sectoral front, all the sectoral indices witness buying interest. Nifty PSU Bank index surged 1.95 per cent and was followed by Nifty IT and Nifty Metal.
 
In overnight development, the US markets recovered from the onslaught of bears that hit them hard for the last three consecutive sessions. The three main US indexes fared well last evening after a report from media indicated that the US and China are moving closer to the trade deal. In the end, the Dow rose 147 points, the S&P gained 20 points, and NASDAQ climbed 46 points. The European markets too turned positive yesterday after the recent sell-off as investors bargain hunted for cheaper stocks and sentiments improved further on the back of optimism over the possibility of the trade deal between the US and China.