Markets to open lower following the RBI's policy announcement
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Summary: The RBI is prepared to hold key policy rates steady for the ninth consecutive meeting in the face of ongoing inflationary concerns.
Capital markets are anticipated to open lower as investors await the Reserve Bank of India's (RBI) policy announcement on Thursday. It is expected that the interest rates set by the central bank will remain unchanged.
As of 7:38 a.m. IST, the gift Nifty GIFc1 was trading at 24,199, indicating that the benchmark Nifty 50 NSEI will open below its previous level of 24,297.5 on Wednesday morning.
Given the continued pressures on inflation, the RBI will likely keep key policy rates unchanged at its ninth consecutive meeting. The central bank's remarks regarding its aggressive "withdrawal of accommodation" policy stance will be closely watched by market investors.
Chief India and Indonesia Economist at HSBC Pranjul Bhandari said that although the RBI is getting close to making a policy change, it will probably hold rates steady until it hears more definitive signals about stable global markets and long-term drops in food inflation.
Any dovish remarks on the economy or interest rates, according to analysts, might strengthen the trend in domestic stocks, especially in rate-sensitive industries like banking, real estate, and automotive.
Following a decrease in fears of a U.S. recession, the benchmark indices for India, the Nifty 50, and the S&P BSE Sensex. BSESN halted a three-session losing skid on Wednesday. This helped them partially catch up with the global market's comeback.
On Thursday, Asian markets opened lower, with the MSCI Asia ex-Japan index (.MIAPJ0000PUS) down 0.7%.
With investors being cautious in the wake of recent market volatility, US equities ended the night lower due to losses in technology firms.
For the fourth consecutive session on Wednesday, foreign institutional investors (FII) sold Indian stocks, offloading shares worth a net of 202.3 billion rupees. ($2.4 billion). Domestic institutional investors (DII), however, offered some assistance by acquiring shares for a net total of 192.8 billion rupees ($2.3 billion) during the same time frame.
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