Market Commentary and Intraday News

Indian Shares Seen Higher On Asian Cues; RBI Decision Key

204 days ago

(RTTNews) - Indian shares may open slightly higher on Tuesday, tracking firm Asian cues as investors await the outcome of today's Bank of Japan policy meeting. With concerns over Hurricane Sandy disrupting trading in the U.S. for a second consecutive session, attention is focused on the storm and its impact on U.S. and world economic growth. Commodities are little changed and the euro is weakening against the dollar on persisting concerns over Greece and Spain.

Closer home, many economists expect the Reserve Bank of India to hold policy rates steady, although another CRR cut is possible. Ahead of its monetary policy meeting today, the central bank lauded the government for its new fiscal consolidation strategy but said further measures are necessary to contain the fiscal deficit.

In its second quarter macroeconomic and monetary developments report released on Monday, the RBI said it expects inflation to come down from the fourth quarter of the current fiscal. "As macro-risks from inflation and twin deficits recede further, that could yield space down the line for monetary policy to respond more effectively to growth concerns," the RBI said in its review of macroeconomic report, signaling the bank may soften its hawkish stance.

On the earnings front, Ballarpur Industries, Biocon, Blue Dart, Dr Reddy's Laboratories, Engineers India, Glenmark Pharma, IDBI Bank, Jyoti Structures, KEC International, Pidilite Industries, Mahindra Satyam, Shoppers Stop and Tata Teleservices are among the companies that will unveil their quarterly results today.

Indian shares ended little changed on Monday, mirroring losses elsewhere across Asia and Europe and lower commodity prices after both NYSE and Nasdaq announced the suspension of equity trading due to Hurricane Sandy. Traders also braced for the Bank of Japan's monetary policy decision and the RBI's monetary policy review meeting closer home for directional cues.

European stocks dropped on Monday, dragged down by insurers on concerns a huge hurricane in the United States would hit their profits. Also, Germany ruled out another Greek debt restructuring and retail sales data suggested that Spain is sinking deeper into recession, denting investor sentiment.

The U.K.'s FTSE 100 edged down 0.2 percent, the German DAX slid 0.4 percent and France's CAC 40 retreated 0.8 percent, while Switzerland's SMI ended little changed with a negative bias. U.S. stock markets were closed on Monday due to weather for the first time in 27 years.

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