RBI monetary policy to steer markets; banks, auto, realty stocks in focus
Premium- The RBI is widely expected to not make any change in key interest rates. The central bank’s commentary on growth and inflation would be closely watched
MUMBAI: The Reserve Bank of India's monetary policy review is likely to steer markets on Friday. Trends in SGX Nifty suggest a weak opening of Indian benchmark indices. Both the benchmark indices hit record closing highs on Thursday. The BSE Sensex edged 382.95 points or 0.74% higher at 52,232.43. The Nifty gained up 114.15 points or 0.73% at 15,690.35.
The RBI is widely expected to not make any change in key interest rates. The central bank’s commentary on growth and inflation would be closely watched. The market expects the central bank to expand its bond buying programme in the second quarter of the financial year with an addition of another ₹1-1.5 trillion, said Saugata Bhattacharya, chief economist at Axis Bank.
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Rate sensitive stocks like banks and financial services, auto and real estate will be in focus today.
Punjab National Bank, Bharat Forge, Bank of India, NIIT and Jammu Kashmir Bank key companies which will announce their March quarter results today.
Britannia Industries on Thursday said its board has approved a proposal to raise ₹698.51 crore by issuing bonus debentures to eligible equity shareholders.
Asian stocks followed Wall Street lower on Friday as signs of a strengthening US recovery boosted bets for higher inflation and an earlier tapering of Federal Reserve stimulus.
US Treasury yields jumped, lifting the dollar and hurting tech shares, after better-than-expected employment data overnight raised expectations for a strong reading for nonfarm payrolls on Friday, while a measure of service sector activity climbed to a record high.
On Wall Street, the S&P 500 lost 0.4%, while the Nasdaq Composite suffered a 1% slide. The Dow Jones Industrial Average fared relatively better, slipping 0.1%.
US stocks got some relief into the close on reports that President Joe Biden is willing to compromise over a proposed corporate tax hike.
The 10-year Treasury yield rose as high as 1.6320% in Asia, after advancing nearly four full basis points overnight.
The dollar index held Thursday's 0.7% rally, its biggest since April, to hover around 90.50.
While Fed officials have consistently said they expect current inflationary pressures to be transitory and for ultra-easy monetary policy to stay in place for some time, they are also increasingly touting the need to at least start talking about a tapering of stimulus.
Gold remained weaker following a 2% tumble Thursday, its biggest since February, amid a stronger dollar.
Crude oil retreated from more than two-year highs on Friday after weekly U.S. crude stocks fell sharply while fuel inventories rose more than expected.
Brent futures fell 0.4% or 25 cents to $71.06 a barrel, after touching their highest since May 2019 earlier in Thursday's session. U.S. WTI slipped 0.3% or 23 cents to $68.58 a barrel, from as high as $69.40 a day earlier, the strongest since October 2018.
(Reuters contributed to the story)
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