The Indian market may open little changed with a negative bias on Wednesday, taking cues from mixed Asian markets, after a positive lead from Wall Street on the back of data showing better-than-expected retail sales eased concerns over the health of the world's largest economy. Trading could remain a little bit choppy due to expectations of an interest rate hike.
With inflation not showing signs of cooling down, the Reserve Bank of India is expected to raise its policy interest rates by at least 25 basis points, when it meets tomorrow to review its mid-quarter policy. After cooling off in April, India's headline annual inflation for May rose 9.06 percent from 8.66 percent in the previous week, a government report yesterday showed.
Meanwhile, according to provisional data released by BSE, foreign institutional investors sold shares worth Rs.798.53 crore on a net basis yesterday, while domestic financial institutions bought shares to the extent of Rs.610.72 crore.
The benchmark indexes Sensex and the Nifty eked out small gains on Tuesday, tracking positive global cues, despite latest data revealing that inflation surged in May.
On Wall Street, stocks posted strong gains on Tuesday, as traders indulged in some hectic buying following recent weakness in the markets. Easing concerns about the global economic outlook following some upbeat economic data from China and U.S. also contributed to the rally. The Dow rose a percent, the Nasdaq added 1.5 percent and the S&P 500 ended up 1.3 percent.
Crude oil prices moved higher on easing worries about demand following some encouraging economic reports from China and the United States, including a report showing a smaller than expected drop in U.S. retail sales. Light sweet crude for July delivery ended up $2.07 at $99.37 a barrel on the New York Mercantile Exchange.
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