Sensex, Nifty to open higher ahead of RBI policy; rate sensitive stocks in focus

The BSE Sensex and the NSE Nifty are set to open higher on Friday, tracking firm cues from global equities. Shares in the Asia-Pacific region were trading mostly higher, while Wall Street closed mixed overnight. Back home, the bullish trends on SGX Nifty also indicated a positive opening for the domestic bourses, with SGX Nifty futures trading 61 points, or 0.35%, higher at 17,458 levels on the Singapore Stock Exchange at 8:10 AM. In absence of any major development in the global market, investors will keep a close on the domestic event as the Reserve Bank of India (RBI) is set to announce its policy decision later today. Rate-sensitive auto, realty, and banking sectors will be in the spotlight ahead of the RBI policy announcement. Among individual stocks, M&M, Titan, Paytm, NMDC, Pfizer, Raymond, and UCO Bank will be in focus ahead of their quarterly earnings.

On Thursday, the domestic bourses ended marginally lower, snapping a six-session gaining streak, as investors booked profit ahead of the RBI’s policy decision. The BSE Sensex ended 52 points, or 0.09%, lower at 58,299 in choppy trade, and the broader NSE Nifty fell 6 points, or 0.04%, to settle at 17,382 levels. NTPC was the biggest laggard in the Sensex pack, followed by SBI, Reliance Industries, Axis Bank, PowerGrid, Kotak Mahindra Bank, IndusInd Bank, and HDFC. On the flip side, Sun Pharma, Nestle India, Infosys, Dr Reddy’s, Wipro, Mahindra & Mahindra, and Tata Steel were among the top laggards.

Here are the key things investors should know before the market opens today:

Wall Street ends mixed

In the overnight trade, the U.S. stocks closed mixed as the rally in technology stocks faded, while losses in energy shares further dented market sentiments. Investors kept a close eye on monthly jobs data for clarity on the pace of interest rate hikes by the Federal Reserve. The U.S. labour department will release the employment report for June, which is expected to show nonfarm payrolls rose by 250,000 jobs last month, albeit lower than 372,000 jobs in June. The Dow Jones Industrial Average fell 0.3%, the S&P 500 shed 0.1%, while the tech-heavy Nasdaq Composite rose 0.4%.

Asian shares edge higher

Shares in the Asia-Pacific region were trading mostly higher in early trade on Friday, despite mixed cues from Wall Street and the looming fear of recession in England. The Bank of England on Thursday announced its biggest interest rate hike in 27 years and warned of a long recession for Britain. The UK’s central bank on Thursday raised interest rates by 50 basis points, its biggest increase since 1995.

Regional heavyweight Japan’s Nikkei 225 rose 0.6%, South Korea’s Kospi climbed 0.8%, and the Straits Times in Singapore added 0.35%.

The Taiwan Weighted index was the best performer in the regional market with a 1.7% gain, while Australia’s ASX 200 and the Jakarta Composite in Indonesia rose 0.5% and 0.1%, respectively.

The Hang Seng index in Hong Kong edged lower with a loss of 0.1%. Markets in mainland China were trading marginally higher, with the Shanghai Composite and the Shenzhen Component rising 0.2% each.

Crude oil slips to pre-Ukraine war levels

The crude prices dropped nearly 4% in overnight trade to hit almost six-month lows as fear of global economic recession raised concerns about the demand outlook. The Brent crude touched $93.50 a barrel, the lowest since February 21, before Russia's invasion of Ukraine after U.S. data showed crude and gasoline stockpiles unexpectedly rose last week. The decision by the OPEC+ countries, including Saudi Arabia and Russia, to increase their supply by 100,000 barrels per day also eased supply concerns.

In Asian trading hours, the Brent oil for October delivery was up 0.35% at $94.44 per barrel, while the U.S. West Texas Intermediate (WTI) crude September futures rose 0.38% to $88.88 a barrel.

RBI policy

The Reserve Bank of India's (RBI) six-member Monetary Policy Committee (MPC) is set to announce its policy decision today amid expectations of at least a 35 basis point (bps) hike in the interest rate to curb inflation. As the inflation pressure continues to hurt economic growth, it is widely expected the central bank, headed by RBI Governor Shaktikanta Das, will raise the key lending rate for the third consecutive time on August 5. So far, the RBI has raised the repo rate by a cumulative 90 bps – 40 bps in an off-cycle meeting in May and 50 bps in June.

FIIs remain net buyers, DIIs net sellers

The foreign institutional investors (FIIs) extended their gaining streak in the Indian equity market on August 4, while domestic institutional investors (DIIs) remained net sellers. As per the exchange data, FIIs net purchased shares worth ₹1,474.77 crore, while DIIs net sold shares worth ₹46.79 crore.

Corporate results

The major companies that will release their June quarter earnings include Titan Company, Mahindra & Mahindra, One 97 Communications, Petronet LNG, NMDC, UCO Bank, Alkem Laboratories, Pfizer, and Raymond. Among others, Engineers India, FSN E-Commerce Ventures (Nykaa), IRB Infrastructure Developers, Aditya Birla Fashion and Retail, Computer Age Management Services, Eris Lifesciences, Fortis Healthcare, Greenply Industries, Minda Corporation, Indigo Paints, Motherson Sumi Wiring India, R Systems International, Shipping Corporation of India, Talbros Engineering, and Zensar Technologies will also be in focus today.