Markets may open with modest gains tracking positive cues from Asian peers

Indian markets are expected to open the session with modest gains as, at the time of writing, SGX Nifty was quoting around 11,742, up by 29 points. Market participants would keenly watch the outcome of the RBI monetary policy which is due today. On the back of subdued inflation and slowing economic growth, the RBI is expected to cut the repo rate by 25 bps and this is somewhat factored in by the markets. However, anything higher than 50 bps will be a big surprise for the markets and the markets may react positively to this announcement. Along with this, MPC’s commentary on future interest rate and inflation trajectory will be closely monitored by the market participants. We would advise our readers to await the credit policy announcement before attempting any serious trades.

Majority of the Asian markets were trading in the positive zone following positive leads from the Wall Street overnight. The Japanese stock market Nikkei has added 0.26 per cent and China’s Shanghai Composite has gained 0.99 per cent, while Hong Kong’s Hang Seng index has shed 0.11 per cent.

Back home, markets started Wednesday's session on a jubilant note and the BSE Sensex and NSE Nifty touched a new life-time high. However, in the mid-day, markets took a 180-dgree turn after private weather forecaster Skymet said India’s monsoon rains were seen below normal this year. Finally, Nifty and Sensex ended below their respective psychological levels of 11,700 and 39,000. The broader market indices underperformed the frontline indices as Nifty Midcap and Smallcap lost 1.11 per cent and 1.07 per cent, respectively. All sectoral indices ended in the red terrain, with Nifty PSU Bank and Nifty Media ending as top losers.

The US markets closed in the positive terrain, but pared some of their gains on the back of somewhat uninspiring economic news. ADP reported private sector employment rose by 129,000 jobs in the month of March, while analysts had been looking for a considerably higher number. Meanwhile, the US ISM non-manufacturing index missed forecasts. The tech-heavy Nasdaq outperformed its counterparts as it climbed 0.60 per cent, while the Dow Industrial Average added 0.15 per cent and the S&P 500 index rose 0.21 per cent.

The European stocks rallied on Wednesday as growing optimism about progress in the US-China trade talks overshadowed some disappointing economic data. France’s CAC 40 surged 0.84 per cent, the DAX of Germany jumped 1.7 per cent and the UK’s FTSE 100 closed with gain of 0.37 per cent.