Today, Bharat stock indices saw a modest rise at the opening bell on Thursday, following encouraging signals from the US markets overnight. The return of foreign portfolio investors (FPIs) to the Bharat market has also provided some support to the stocks. As of 9:29 am, the Sensex stood at 72,386 points, up by 234 points or 0.32%, while the Nifty reached 21,995 points, showing an increase of 65 points or 0.30%. Among the Nifty 50 stocks, 37 advanced, 12 declined, and 1 remained steady at the time of reporting.
RBI Monetary Policy Meeting in Focus
Investor attention is keenly focused on the outcome of the three-day Reserve Bank of India (RBI) monetary policy meeting, with the forward guidance expected to be announced at 10 am today. The RBI, which typically holds six bimonthly meetings in a financial year, deliberates on various factors including interest rates, money supply, inflation outlook, and macroeconomic indicators. In its December meeting, the RBI maintained the policy repo rate at 6.5%, marking the fifth consecutive time of no change.
Expectations for Repo Rate Pause
Experts from SBI Research anticipate that the Monetary Policy Committee of the RBI will likely keep the repo rate unchanged in its February review meeting. The repo rate, which is the interest rate at which the RBI lends to other banks, has seen no change in recent months. Despite previous increases, the repo rate currently stands at 6.5%, implemented gradually since May 2022 as part of efforts to combat inflation.
Inflation and FPI Inflows Impact
While retail inflation in Bharat remains within the RBI’s comfort level of 2-6%, it still exceeds the ideal scenario of 4%. As of December, inflation stood at 5.69%, prompting continued attention from monetary policymakers. In terms of FPI inflows, foreign investors resumed buying Indian stocks in February after a period of selling in January. So far this month, FPIs have purchased equities worth Rs 3,044 crore, indicating renewed interest in the Indian equity market following a brief period of divestment.
In summary, Bharat stock indices saw marginal gains at the opening bell, influenced by positive cues from the US markets and renewed FPI interest. Investor focus remains on the outcome of the RBI monetary policy meeting, with expectations leaning towards a repo rate pause. With inflation hovering above the ideal threshold, the RBI continues to monitor economic indicators closely.
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