Sensex, Nifty Seen Tad Higher Ahead Of RBI Policy Meet

Indian shares may open a tad higher on Wednesday ahead of the RBI policy meet today.

Markets are divided on whether the central bank will hike the reverse repo rate or pause to see the impact of the Omicron Covid-19 variant on the domestic economy.

Meanwhile, the Ministry of Finance told Parliament on Tuesday in reply to a question raised in the House that the government has no plans to abolish long term capital gains (LTCG) tax on equities and mutual funds.

Benchmark indexes Sensex and the Nifty jumped around 1.6 percent each on Tuesday to snap a two-day losing streak, while the rupee surrendered early gains to end on a flat note.

Asian markets followed Wall Street higher and Treasury yields pared an advance after rising across the curve Tuesday, while the dollar held a decline against most of its major peers. Oil edged lower in Asian trade after climbing more than 3 percent on Tuesday.

U.S. stocks staged the biggest rally in nine months overnight and Treasuries fell amid optimism that the Omicron strain won’t derail global growth.

The tech-heavy Nasdaq Composite jumped as much as 3 percent while the Dow climbed 1.4 percent and the S&P 500 surged 2.1 percent.

European stocks also closed on a strong note Tuesday as Chinese policymakers shifted toward easing mode and a report showed German industrial output rose more than expected in October.

The pan European Stoxx 600 soared 2.5 percent. The German DAX surged 2.8 percent, France’s CAC 40 index rallied 2.9 percent and the U.K.’s FTSE 100 added 1.5 percent.