Indian shares to open higher: Indian shares are set to begin the day on a positive note in anticipation of the Reserve Bank of India's (RBI) monetary policy decision. 

The central bank is widely expected to maintain its key interest rate unchanged for the sixth consecutive meeting.

GIFT Nifty was seen trading at 22,047 at 7:57 am, indicating an opening above Wednesday's close of 21,930.50 for the Nifty 50.

The RBI is scheduled to announce its rate decision at 10:00 am. 

A recent Reuters poll of 60 economists suggested that the RBI would likely keep its key repo rate steady at 6.50 per cent and maintain this stance until at least July.

Market participants are keenly observing if the recent moderation in core inflation and the government's focus on fiscal prudence, as reflected in the interim budget, would prompt policymakers to signal a shift in the rate cycle.

Analysts at Nomura anticipate the Monetary Policy Committee (MPC) to unanimously vote for a rate pause and anticipate a shift in policy guidance towards a more neutral stance. 

Additionally, the RBI is expected to introduce measures to address the prevailing liquidity tightness in the economy.

The halt in rate hikes this fiscal year, following a substantial 250 basis points increase last fiscal, has driven the benchmark Nifty 50 up by 26.33 per cent to record highs since March 2023.

Investors are also closely eyeing the RBI's commentary on the possibility of future rate cuts, according to Vinod Nair, head of research at Geojit Financial Services.

Meanwhile, Asian markets have opened higher, and Wall Street equities advanced overnight, with the S&P 500 closing at a record high, supported by robust earnings.

On Wednesday, foreign institutional investors (FIIs) net sold Indian shares worth Rs 1,691 crore, breaking a three-day buying streak, while domestic institutional investors (DIIs) purchased shares worth Rs 328 crore.

Additionally, investors will closely monitor rate-sensitive sectors like banking, finance, auto, real estate, and housing following the RBI's policy decision. 

Key earnings reports expected today include those from Apollo Hospitals Enterprise, Zomato, Life Insurance Corporation of India, and Grasim Industries.

Stocks to watch 

Tata Consumer Products: Company posted a jump in third-quarter profit, aided by higher demand for 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.

(With Reuters Inputs)