Domestic markets are expected open on a flat note on Wednesday, indicates SGX Nifty. According to analysts, as all eyes are on the three-day meeting of RBI monetary policy, markets are expected to move in a range. Though the wide expectation is a status-quo stance from RBI on interest rates, analysts said the outlook will be closely watched, given the uncertainty ahead on global and domestic economic fronts.

World Bank cuts GDP growth

World Bank has already cut India’s GDP growth to 6.3 per cent for FY24 from its earlier projection of 6.6 per cent. According to World Bank, constrained private consumption due to high inflation is the main reason for the expected slowdown. However, it expects India to continue to be among the fastest-growing economies. 

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According to Sharad Chandra Shukla Director, Mehta Equities, the monetary policy is expected to maintain its current stance of keeping interest rates unchanged. “The accompanying commentary will likely emphasise the primary objective of controlling inflation, indicating that if the prescribed inflation band is breached, interest rates may be increased in the future,” he added.

Global markets mixed

SGX Nifty at 17,820 indicates a flat-to-positive opening for domestic markets. Nifty futures on Tuesday closed at 18,672.95. Asian stocks are mixed in early trade on Wednesday, though the US stocks closed in the green overnight.

The domestic market is facing a struggle at higher levels, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd. “FIIs too have been sellers for the past 3 days, thus capping the upside. With the RBI policy outcome now nearing, we expect the market to remain cautious in the near term with action shifting to interest-sensitive sectors,” he added.

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Itus Capital Equity Fund said, “We have also just completed the earnings season for Q4FY23, and we have seen strong growth in earnings across capital goods, auto ancillaries with first signs of growth coming back into healthcare and pharma (this was a sector that has stagnated for the last 1.5 years). We continue to believe that the next year will be around bottom-up stock picking and owning businesses and promoters/managements who have a strong reinvestment opportunity,”

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