The Indian equity benchmarks gained close to 2 percent on Friday in anticipation of a rate cut after May inflation eased further to 4.7 percent. Short covering and positive global cues also added to the zeal driving the Nifty above 5800 at close. BSE Sensex advanced 350.77 points to close at 19177.93 and the Nifty rallied 109.30 points to 5,808.40.
The market will be carefully eyeing the RBI credit policy. A CNBC-TV18 poll of bankers and economists show that 70 percent of the respondents do not expect RBI to cut repo rate or the cash reserve ratio (CRR). Only 30 percent respondents expect a 25 basis points rate cut in the upcoming policy.
Markets closed out a volatile week on Wall Street broadly in the red led lower by banks, as investors digested a batch of mixed economic reports and remained on edge as concerns lingered over whether central banks will pare back their stimulus programs. Adding to woes, the international monetary fund (IMF) revised its US growth outlook for 2014 down to 2.7 percent, while maintaining the 2013 guidance at 1.9 percent.
The consumer sentiment retreated to 82.7 in June after hitting its highest in nearly six years in May. Producer prices rose more than expected in May, with the producer price index gaining 0.5 percent while industrial production was unchanged. And current account deficit (CAD) widened in the first quarter to USD 106.1 billion
European markets ended flat, paring gains after mixed economic reports from the US failed to calm nerves about the Federal Reserve’s bond buying program.
The FTSEurofirst 300 index closed provisionally up 0.2 percent at 1,176.1 points, following a volatile session. However, the index closed lower.
Japan markets were up nearly 2 percent, while trade in the rest of Asia's equity markets was subdued ahead of this week's Federal Reserve policy meeting. Japan's Nikkei added 160 points, South Korea's benchmark was steady at the 1,890 mark.
Other asset classes
In the currency space, the euro stays above 1.33 to the dollar ahead of the US Reserve Fed meet this week. The dollar index is below the 81 mark. The dollar-yen is sub 95.
In commodities, Brent Crude hit a nine-month high, rising above 105 dollars per barrel.
And from the precious metals space, gold is hovering around 1388 dollars an ounce.
Stocks in news
M&M has announced a multi-structured deal entering into a share swap with Spain's CIE Auto buying 13.2% stake in CIE automotive. The company will fund this buy via selling stake in three group firms to CIE.
Tata Motors' JLR wholesale numbers came in slightly below estimates as its total sales up 8 percent month-on-month (M-o-M).