Domestic benchmark equity indices opened higher on Thursday ahead of the Reserve Bank of India’s (RBI) monetary policy decision, where the central bank is expected to keep its key interest rate unchanged for a sixth consecutive meeting.

The BSE Sensex was trading 233 points or 0.32% higher at 72,385. Nifty50 was trading at 21,994, up 64 points or 0.29% at around 9.21 am.

The RBI’s rate decision will be announced at 10:00 a.m. IST.

Investors are also waiting to see if the moderation in core inflation and focus on fiscal prudence in the interim budget would enable policymakers to signal a turn in the rate cycle.

From the Sensex pack, Power Grid, HCL Tech, M&M, NTPC, and IndusInd Bank opened higher, while ITC, Maruti, Bajaj Finance, Nestle, and UltraTech Cement opened lower.

Rate-sensitive sectors like banking, finance, and auto traded higher in early trade ahead of the RBI’s policy decision. However, the Nifty Realty index was in the red.Among individual stocks, Lupin surged 7% after the drugmaker reported a higher-than-expected rise in December quarter profit, helped by strong demand in North American and domestic markets.Power Grid Corporation shares rose over 5% after the state-run energy transmission company posted a rise in third-quarter profit, buoyed by strong power demand.

Experts Take
“The mother market US is setting new records and this provides the support to facilitate new records in India, too. The bulls are again on the front foot and will use any positive news to push the market forward,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

“The event which will be closely watched today would be what RBI says. No rate action is expected today, but the commentary from the central bank would be keenly watched. Positive comments on the economy and any signs of a dovish tone will be positive for the markets,” Vijayakumar added.

Deepak Jasani, Head of Retail Research at HDFC Securities, said, “Nifty seems to be consolidating at higher levels after facing resistance repeatedly in the 22053-22127 band over the past few days. The RBI MPC meet outcome on Feb 8 could create minor volatility. Nifty needs to cross the band mentioned above for acceleration in the upmove, while 21727 could offer support on down moves.”

Global Markets
Most Asian markets tracked Wall Street higher on Thursday, but Chinese stocks were battling to sustain a rally after data raised concerns about deflationary pressures in China and suggested the economic slowdown may have further to run.

Japan’s Nikkei surged 1.5%, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2%, with gains in Australia and South Korea being eroded by a 0.2% fall in Hong Kong’s Hang Seng index.

On Wall Street, S&P 500 closed at a record high, buoyed by strong earnings from Chipotle Mexican Grill and Ford Motor, which offset jitters about U.S. regional banks.

FII/DII Tracker
Foreign institutional investors net sold Indian shares worth Rs 1,691 crore on Wednesday, snapping a three-day buying streak. Domestic institutional investors purchased Rs 328 crore of shares.

Oil Prices Rise
Oil prices rose after Israel rejected a ceasefire offer from Hamas, as talks continued to try to end the Gaza conflict and wider Middle East tensions that have kept the market on edge since October. Signs of solid U.S. fuel demand also bolstered the market’s upward trend this week.

Brent crude futures were up 30 cents, or 0.38%, at $79.51 a barrel. U.S. West Texas Intermediate crude futures rose 27 cents, or 0.37% to $74.13 a barrel.

Rupee Strengthens
The Indian rupee gained, aided by better risk appetite amid a pause in the dollar’s recent rally, with traders awaiting cues from the Reserve Bank of India’s (RBI) monetary policy decision.

The rupee was at 82.9025 as of 09:35 a.m., up by 0.08% compared with its close of 82.9675 in the previous session.

The dollar index was little changed at 103.98 while most Asian currencies were rangebound save for the Indonesian rupiah, which rose 0.6%.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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