Indian equities are likely to open weak on Wednesday as investors await the Reserve Bank of India’s monetary policy decision. The market will closely watch whether Governor Sanjay Malhotra signals further rate hikes and what additional measures the central bank may take to contain inflation.
A renewed rise in crude oil is adding pressure. Brent crude moved back towards $102 a barrel, while most Asian markets traded lower.
Gift Nifty, which closed at 22,799.50 on Tuesday night, slipped to around 22,734 on Wednesday morning, indicating a weak start for the Indian market.
The RBI’s Monetary Policy Committee decision will be announced by Governor Sanjay Malhotra at 10 am. The market expects the repo rate to be raised from 5.25% to 5.50%. If that happens, it will be the first rate hike since Malhotra became the governor.
Apart from the rate decision, investors will focus on the RBI’s assessment of inflation, economic growth and the future path of interest rates.
Geopolitical tensions in West Asia, Yemen and Ukraine remain unresolved, while indirect talks between the US and Iran have stalled.
Crude oil, which slipped towards $97 on Tuesday, rebounded sharply and moved close to $102 on Wednesday morning. Higher tanker freight rates, continued Iranian attacks and stronger crude purchases by China supported prices.
Global refining disruptions are also keeping fuel prices elevated. More than half of Russia’s refining capacity is reportedly out of operation, while refineries in Iran, Saudi Arabia and other Gulf countries are operating below normal capacity.
Brent crude was trading around $101.71 a barrel in early trade, while WTI stood near $90.51.
US equities closed higher on Tuesday, led by technology and AI stocks.
The S&P 500 and Nasdaq touched fresh intraday records before giving up part of their gains. The Dow Jones rose 253.38 points, or 0.49%, to 51,521.28. The S&P 500 gained 44.98 points, or 0.58%, to 7,818.93, while the Nasdaq Composite advanced 122.58 points, or 0.45%, to 27,599.89.
Nvidia, AMD, Marvell and Broadcom were among the major technology stocks that gained.
US futures were mixed in early Wednesday trade. Dow futures slipped about 0.03%, while S&P 500 futures gained 0.12% and Nasdaq futures rose around 0.06%.
Asian equities were largely weak. Japan’s Nikkei fell around 0.50% after opening higher, while South Korea’s Kospi declined 0.35%. Hong Kong’s Hang Seng was down around 0.60%.
The Shanghai Composite gained about 0.30%, while Taiwan traded marginally higher.
Indian equities extended their recovery on Tuesday after ending an eight-week losing streak on Monday.
The Sensex closed 685.34 points, or 0.95%, higher at 73,067.81. The Nifty gained 220.35 points, or 0.98%, to 22,776.10. Bank Nifty rose 0.76% to 55,128.40. The Nifty Midcap 100 climbed 1.08%, while the Smallcap 100 gained 1.56%. All major sectors except IT and realty ended higher.
Kotak Mahindra Bank rose 3.82%, Axis Bank gained 2.11% and IndusInd Bank advanced 2.2%. Federal Bank fell 2.25% to ₹320. Market breadth remained positive, with 2,768 stocks advancing and 1,619 declining on the BSE.
Foreign investors continued to sell, with net cash market outflows of ₹2,961.30 crore. Domestic institutions bought shares worth a net ₹5,088.92 crore.
Gold closed slightly higher at $4,165.30 an ounce on Tuesday but slipped to around $4,150 in early Wednesday trade. In Keralam, 22-carat gold rose by ₹760 per sovereign to ₹1,10,160.
Silver moved up to around $61.35 an ounce. Platinum stood at $1,697, palladium at $1,153 and rhodium at $8,300.
Rubber prices rose in both international and domestic markets. In Bangkok, RSS-1 was quoted at $290.40 per quintal and RSS-3 at $287. In Keralam, RSS-4 rose to around ₹28,100 per quintal.
Copper gained 0.51% to $14,502.35 a tonne. Aluminium rose 0.93% to $3,146.90. Lead, nickel, zinc and tin also moved higher.
Cocoa fell 1.79% to $5,762 a tonne. Arabica coffee jumped 4.07% to $3.0445 a pound. Palm oil slipped 0.39% to 4,560 Malaysian ringgit a tonne.
The US Dollar Index closed at 101.83 on Tuesday and recovered slightly to 101.98 on Wednesday morning.
The euro rose to $1.1243, while the pound strengthened to $1.3255. The Japanese yen weakened to around 158.32 against the dollar. The US 10-year Treasury yield rose to around 5.309%, while the 30-year yield stood at 5.685%.
The rupee weakened further, with the dollar gaining 13 paise to close at ₹96.42. In the offshore forward market, the dollar moved up to around ₹96.44. The euro strengthened to around ₹108.42, while the Chinese yuan rose to ₹14.38.
Bitcoin slipped below $85,350. Ether fell below $2,685, while Solana moved below $120.
Sensex: 73,067.81 | +0.95%
Nifty 50: 22,776.10 | +0.98%
Bank Nifty: 55,128.40 | +0.76%
Midcap 100: 59,761.20 | +1.08%
Smallcap 100: 19,448.70 | +1.56%
Dow Jones: 51,521.28 | +0.49%
S&P 500: 7,818.93 | +0.58%
Nasdaq: 27,599.89 | +0.45%
Dollar: ₹96.42 | +₹0.13
Gold: $4,165.30/oz | +$23.80
Gold in Keralam: ₹1,10,160/sovereign | +₹760
Brent crude: $100.58/barrel | +$0.26