Nifty, Sensex set for flat open ahead of RBI rate decision

Market opening: Indian blue-chip indexes, which reached record highs recently, are poised to open with little change on Friday as investors await the Reserve Bank of India's (RBI) monetary policy decision. The central bank is anticipated to maintain its key interest rate for a seventh consecutive meeting.

The GIFT Nifty was trading 0.13 per cent lower at 22,541 as of 8:25 am, suggesting that the NSE Nifty 50 will open close to Thursday's closing level of 22,514.65.

In the previous session, NSE Nifty 50 and S&P BSE Sensex settled at all-time closing highs, buoyed by strong performances in the financial sector, particularly by top private lender HDFC Bank, which experienced a sequential increase in deposits, ahead of the central bank's policy announcement.

According to a Reuters poll of economists, the RBI is expected to maintain rates unchanged at its monetary policy decision later in the day.

"We expect RBI to keep policy repo rate unchanged, retain the monetary policy stance of withdrawal of accommodation, and sound optimistic on growth," analysts at Goldman Sachs commented.

Despite the potential comfort from decreasing core inflation, the central bank is likely to proceed cautiously due to the upward risks to food inflation stemming from weather disruptions and the potential adjustment in the US interest rate easing trajectory, they added.

Overnight, Wall Street equities closed lower following remarks from three Federal Reserve officials, sparking concerns that the US central bank might postpone rate cuts. Markets are anticipating a 25 basis point Fed rate cut in June, but recent data, including manufacturing and labor market indicators, have raised doubts about the US rate outlook.

Asian markets opened lower, with the MSCI Asia ex-Japan index dropping by 0.75 per cent.

Stocks to Watch

• Bajaj Finance: The non-bank lender reported a 34 per cent year-on-year growth in assets under management (AUM) and a 35 per cent increase in deposits book in the March quarter.
• Nestle India: The National Consumer Dispute Redressal Commission dismissed a 2015 complaint by the Department of Consumer Affairs seeking compensation of Rs 285 crore from the company.
• Bandhan Bank: The company announced that total deposits in the March quarter grew by 25.1 per cent year-on-year, while loans and advances were up 17.8 per cent.
• Hero MotoCorp: The company received a tax order demanding Rs 309 crore.