BSE, NSE closed today for Guru Nanak Jayanti; trading on MCX to start at 5 pm
RBI’s MPC meeting is scheduled this week.
There is very little room for a rate reduction but RBI may maintain accommodative stance.
The Indian economy shrank 7.5% in Q2 of the current financial year, a pleasant surprise given the expectations of a 9-11% contraction. While some have attributed this to pent-up demand and festival sales, others see it as part of normalization of economic activity.
India’s currency, debt and equity markets – BSE and NSE – are closed today for Guru Nanak Jayanti. The financial markets will resume trading on Tuesday, December 1. Commodity exchange MCX will however open for trading for the evening session, from 5:00 pm – 11:30 pm. The morning session on MCX – from 09:00 am – 5:00 pm – will remain closed for trading due to the public holiday.
On Friday, the NSE Nifty 50 index ended 0.14% lower at 12,968.95 and the S&P BSE Sensex closed down 0.25% at 44,149.72. During the last week, the Sensex advanced 0.60%.
RBI’s MPC meeting is scheduled this week. “Market participants would want to take cues from the likely inflation trend and any upward revision of growth forecasts to plan their next move. There is a high probability that the RBI would maintain an accommodative stance given the economy is slowly recovering and facing inflationary pressures,”
“Markets are not likely to show significant movement in either direction given that there is very little room for a rate reduction. In fact markets are expected to enter a holiday mood with no major directional moves in the weeks to come. Stock-specific sectoral rotations are likely to unfold in the near term. Investors are advised to increase their weights on IT, Pharma and resilient private sector banks which might see some traction,”
Asian equity markets swung today as hopes that vaccines will soon be rolled out played against concerns over a pick-up in virus cases around the world.
44,149.72 -110.02 (-0.25%)
Oil prices were also under pressure ahead of a two-day meeting of major producers, with traders worried that they had still not agreed on an extension of the output cuts that have provided crucial support for most of the year.
World markets have surged this month thanks to breakthroughs on vaccines, while investors have also been cheered by Joe Biden’s US presidential election win and signs that incumbent Donald Trump will allow a smooth transfer, despite claiming voter fraud.
With at least three drugs in the pipeline and approval in some countries said to be just weeks away, there is a general feeling of optimism on trading floors as dealers forecast an economic rebound next year.
Market experts say enthusiasm for Indian stocks may last for some time as earnings are also seen as favorable.
The central bank is likely to maintain an accommodative policy stance
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