Sensex, Nifty Set For Weak Start Ahead Of RBI Policy Outcome

Indian shares are seen opening lower on Friday as investors await the outcome of Reserve Bank of India’s monetary policy meeting.

The central bank is expected to maintain status quo on interest rates and reaffirm its commitment to provide adequate liquidity to support credit offtake and anchor bond yields.

As several states start removing lockdown restrictions and speed up the vaccination drive, the economy will start recovering from July, India’s Chief Economic Advisor (CEA) KV Subramanian said.

Benchmark indexes Sensex and the Nifty rose about 0.7 percent on Thursday to reach record closing highs, while the rupee rose by 18 paise to settle at 72.91 against the U.S. dollar, snapping its three-day losing streak.

Asian markets traded mixed this morning, the dollar jumped and yields ticked higher as robust U.S. economic data released overnight boosted bets for higher inflation and an earlier tapering of Federal Reserve stimulus.

Gold hovered near two-week lows after seeing its worst tumble since February while oil dropped from over two-year highs on concerns about the patchy roll-out of anti-coronavirus vaccinations around the globe.

U.S. stocks ended lower overnight as upbeat private payroll, jobless claims and service sector activity data led to renewed concerns about the outlook for monetary policy. Investors also mulled over a new report that Biden may be open to a lower tax hike.

The Dow slipped 0.1 percent and the S&P 500 dropped 0.4 percent while the tech-heavy Nasdaq Composite lost 1 percent.

European stocks ended Thursday’s session broadly lower as upbeat euro zone business growth data fanned fears of rising inflation.

The pan European Stoxx 600 eased 0.1 percent. France’s CAC 40 index shed 0.2 percent and the U.K.’s FTSE 100 dipped 0.6 percent, while the German DAX rose 0.2 percent.

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