SENSEX NIFTY
Dec 18, 2012, 09.42 AM IST | Source: Moneycontrol.com

Market watch: All eyes on RBI's credit policy today

The Indian market has been rangebound over the last many sessions. After a mildly bullish trade on Friday, the equity benchmarks witnessed lacklustre activity and closed marginally in the red on Monday. The market will closely watch the Reserve Bank of India’s mid-quarter monetary policy review today.

Moneycontrol Bureau

The Indian market has been rangebound over the last many sessions. After a mildly bullish trade on Friday, the equity benchmarks witnessed lacklustre activity and closed marginally in the red on Monday.

The Sensex closed down 73 points at 19,244.42. The Nifty ended at 5,857.90, 21 points below its previous close.

The market will closely watch the Reserve Bank of India’s mid-quarter monetary policy review today. 

According to CNBC-TV18's poll, 70 percent of bankers and economist expect the Reserve Bank to cut cash reserve ratio (CRR) by 25 to 50 basis points. Only 30 percent expect RBI to keep the CRR unchanged.

Most don’t believe the Reserve Bank will cut policy rates. Infact 90 percent said no repo rate cut. However, there is unanimity that rate will be cut atleast by January. Majority expect 25 to 50 basis of repo rate cut before the financial year ends.

Most respondents also expect the Reserve Bank to signal a pro-growth stance, the change in the language sounding more dovish in the policy stance. The market will look out eagerly for inflation.

Also read: RBI seen defying rate cut calls despite easing inflation

Stocks in news:

Sun Pharma has acquired URL business from Takeda (deal size not disclosed). 

Reliance Power ’s promoters will sell 5.42 percent in company via OFS on December 19. Floor price shall not be publicly disclosed by sellers.

Godrej Industries  on Monday said Singapore-based investment firm Temasek is acquiring a 19.99 percent stake in its subsidiary Godrej Agrovet for about Rs 572 crore.

Kingfisher Airlines has apparently told the 17-bank consortium that it does not require any more funds and added only Rs 425 crore was required to resume partial operations.

A quick look at global cues today.

US markets:

The US markets accelerated their gains in the final hour of trading to finish near session highs, as Wall Street cheered hopeful signs of progress in the "fiscal cliff" discussions.

The CBOE volatility index dropped near 16.

US economic data:

New York Fed's Manufacturing Index slipped to minus 8.1 in December versus a reading of minus 5.2 in November. This is the fifth straight monthly decline in New York Manufacturing Activity.

Key data to watch out for in the US today:

Housing Market Index is expected to come in slightly higher at 47 for the month of December.

European markets:

European Markets close mixed as investors cashed in some equity holdings at the start of the final, full trading week of 2012.

Asian markets:

Asian shares crept higher on Tuesday, tracking the overnight gains in US stocks on optimism for progress in resolving the US budget crisis before the year-end deadline.

Currency space:

The euro was firm above 1.31 to the dollar benefiting from an improvement in risk appetite on hopes of a progress on the US budget stalemate. The dollar index stayed below the 80 mark. Meanwhile, the yen stabilised versus the dollar.

Commodities:

Brent crude prices slipped while US. oil futures gain as news of a key US pipeline expansion will be completed next month and optimism about a deal to avoid the "fiscal cliff'' prompted spread trading between the two contracts.

Meanwhile, gold continued to hover around USD 1,698 per ounce levels.

Vini Amesar.
Vini.amesar@network18online.com

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