RBI IN FOCUS

 

RBI IN FOCUS

 

WORLD MARKETS

 

US indices gained 0.9%-2.1% to extend Tuesday's rebound, monitoring another round of corporate earnings and awaiting Thursday's CPI data. Nasdaq gained the most.

 

Markets are also waiting for US Consumer Price Index report to be released today, which is estimated to show that prices rose 0.4% in January, for a 7.2% gain from one year ago.

 

US 10-year treasury yield eased 2.5 bps to 1.94%. Dollar index eased 0.1% to 95.55. Spot gold rose 0.5% to $1,834.30 per ounce.

 

Brent crude futures fell 34 cents, or 0.4%, to $90.44 per barrel while WTI crude settled 30 cents, or 0.34%, higher at $89.66 per barrel.

 

European markets gained 1%-1.6%.

 

AT HOME

 

Benchmark indices soared 1.1% each, extending winning streak to second straight day. Sensex settled at 58465, up 657 points while Nifty added 197 points to finish at 17463. Nifty mid-cap and small-cap indices rose 1.1% and 0.4% respectively, snapping 4-day losing streak. Except 0.4% lower Oil & Gas index, all the BSE sectoral indices ended in green, with Auto and Consumer Durables indices leading the gains, up 2.2% and 1.8% respectively.

 

FIIs net sold stocks worth Rs 893 cr but net bought index futures and stock futures worth Rs 1457 cr and 1141 cr respectively. DIIs were net buyers to the tune of Rs 1793 cr.

 

Rupee depreciated 6 paise to end at 74.81/$.

 

OUTLOOK

 

Today morning, Nikkei is up a third of a percent while Hang Seng and Shanghai are marginally in the red. SGX Nifty is suggesting around 40 points higher start for our market.

 

In yesterday's report we had said that 17043, the low made Tuesday, was the immediate support while 17515 was the immediate hurdle.

 

Nifty soared to touch a high of 17477 before closing at 17463.

 

17515 continues to be immediate hurdle, upon sustained crossover of which, 17794, the top made last week, would be the next upside level to eye.

 

17043, the low made Tuesday, which roughly coincided with the trendline adjoining recent bottoms on the daily chart, continues to be immediate support.

 

RBI's Monetary Policy Committee will announce its decision today. It is widely expected that the MPC will maintain the key lending rate, i.e. Repo Rate at 4.0%, but increase the reverse repo rate, which is currently at 3.35%, by 15 to 40 bps. The stance is mostly expected to be maintained as "Accommodative".

 

Hindalco, M & M and Hero Motocorp will report their quarterly numbers today.