Sensex and Nifty opened lower on Wednesday ahead of the outcome Reserve Bank of India’s bi-monthly policy meeting due later today. BSE Sensex lost 101.24 points to mark the day’s low of 32,701.2 while NSE Nifty dropped 41.95 points to hit the day’s low at 10,076.3. The Indian rupee slipped 6 paise to 64.44 against the dollar at the interbank forex market ahead of the announcement of RBI’s monetary policy. The upmove in the shares of Reliance Industries trimmed the losses of key indices while on the other hand, HDFC Bank, ITC, HDFC, SBI, ICICI Bank dragged. The resolution Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel will be made public on December 6. The central bank had reduced the benchmark lending rate by 0.25% points to 6% in August, bringing it to a 6-year low, however, kept it unchanged in October.
Shares of Cipla, Infosys, Coal India, Kotak Mahindra Bank, and Sun Pharma were the only notable gainers on Sensex after RIL, advanced up to 0.6% while Tata Steel, SBI, Hero MotoCorp, Bajaj Auto, HDFC and ITC traded in red. India’s GDP growth has shown signs of recovery last week at 6.3% but it will not have any bearing on the Reserve Bank of India’s monetary policy decision tomorrow. Analysts say higher inflation, which may even breach its 4% target in the next few months, higher oil prices and the impact of the seventh pay commission would make the central bank to keep the repo rate on hold for the second time, and for the third time in February too, irking Prime Minister Narendra Modi’s advisor Ashima Goyal, according to whom, the predictions are “overestimated”
“We expect the RBI to keep rates on hold this time and in February as well as the inflation is likely to remain high. The crude oil price is also hovering around $63 per barrel; the US oil price is also high,” Madhavi Arora, an economist at Kotak Institutional Equities said, adding that the rebound in the GDP growth will not have any effect on the monetary policy decision. The benchmark Sensex opened flat at 32,798.5 while t5he broader Nifty lost almost 29.45 points to open at 10,088.8.
US stocks settled lower on Tuesday as technology stocks lost steam while investors assessed how a Republican US tax overhaul would impact corporate earnings. The S&P 500 fell for a third straight session, a streak not seen since early August, trimming the index’s rally this year to 17 percent, Reuters reported. The Dow Jones Industrial Average lost 0.45% to end at 24,180.64 points, while the S&P 500 ended down 0.37% at 2,629.57. The Nasdaq Composite dropped 0.19% to 6,762.21.