IGI Logo

 Indian shares are set to open 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.

India's GIFT Nifty was trading at 22,047 as of 7:57 a.m. IST, indicating that the Nifty 50 will open above Wednesday's close of 21,930.50.

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

A Reuters poll of 60 economists in early February indicated that the RBI would keep its key repo rate unchanged at 6.50% on Thursday and maintain status quo until at least July.

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.

"We expect the MPC (monetary policy committee) to unanimously vote for a (rate) pause and policy guidance to shift away from the current tightening bias towards one that is more neutral," analysts at Nomura.

More importantly, the RBI is likely to introduce measures to address the current frictional liquidity tightness in the economy, they added.

The pause in rate hikes this fiscal year, following a 250 basis points increase last fiscal, has propelled the benchmark Nifty 50 up 26.33% to fresh highs since the end of March 2023.

The RBI's commentary on potential rate cuts will also be closely monitored, said Vinod Nair, head of research at Geojit Financial Services.

Asian markets opened higher. Wall Street equities advanced overnight, with S&P 500 closing at a record high, supported by strong earnings. [MKTS/GLOB]

Foreign institutional investors net sold Indian shares worth 16.91 billion rupees (around $204 million) on Wednesday, snapping a three-day buying streak. Domestic institutional investors purchased 3.28 billion rupees of shares.

STOCKS TO WATCH:

** Tata Consumer Products: Company posted a jump in third-quarter profit, aided by higher demand of tea and staples.

** Lupin: Drugmaker reported a bigger-than-expected rise in December quarter profit, helped by strong demand in North American and domestic markets.

** Power Grid Corp of India: State-run energy transmission company posted a rise in third quarter profit, buoyed by strong power demand.

** Rate-sensitive sectors like banking, finance, auto, real estate and housing following the RBI's policy decision.

** Key earnings: Apollo Hospitals Enterprise, Zomato, Life Insurance Corporation of India, Grasim Industries

($1 = 82.9760 Indian rupees)