Markets set for positive start; RBI action eyed

The opening on the Dalal Street is expected to be in the green zone tracking positive Asian cues. RBI’s monetary policy will remain in focus.

Headlines for the day:

Raja challenges PM on Unitech, Swan stake sale

Jet Airways plans to merge JetLite, Konnect

Credit growth likely to decelerate further



Major corporate action

RBI's first quarter monetary policy

Results: Asian Paints, BHEL, Cairn India, Glenmark Pharmaceuticals, JSW Steel, MRPL, Maruti Suzuki India, Opto Circuits (India), Shriram Transport Finance Co., TTML

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Indian indices

Today is an important day as the Reserve Bank of India (RBI) will unveil its first quarter review of the monetary policy. Inflation continues to be the top priority for the RBI and it is set to raise rates by 25 basis points for the 11th time in 17 months. Growth needs to be sacrificed to smother inflationary pressures that have not come down despite a tightening by 425 basis points from March 2010.

The big boy Reliance Industries Ltd (RIL) had declared Q1 numbers post market hours yesterday, which were in-line with Street estimates. RIL may also drive the market sentiments. The opening on the Dalal Street is expected to be in the green zone tracking positive Asian cues.

However, the concerns about a US credit rating downgrade or even default may again make investors jittery about the global economy.

Earnings will continue to pour in and may further affect the sentiments.

Daily trend of FII/MF investment in equities

The FIIs have purchased Indian shares to the tune of Rs524.70 crore on July 25, 2011. The domestic investors have bought Indian shares worth a net of Rs306.70 crore on July 22, 2011. The data is as per SEBI website.

Global signals

The European stocks ended mostly lower on Monday (July 25, 2011) as the possibility of a US default and a further downgrade of Greece's credit rating weighed on sentiment, resulting in a flight to safety that pushed gold prices to record highs and the Swiss franc to an all-time high against the dollar.

The US stocks dipped on Monday as lawmakers remained in a standoff over raising the debt ceiling to avoid default, but investors were convinced a compromise will be reached before next week's critical deadline.

The Asian markets were trading higher on Tuesday (July 26, 2011) helped by short-covering. SGX Nifty was trading 17.5 points higher.

Commodity cues

Oil prices fell on Monday in choppy trading as the inability of the US Congress to reach agreement on raising the government debt limit kept investors wary of risky assets and concerned about the global economy.