Indian equity markets are likely to open on a cautious note on Monday amid a slew of negative news, such as the India Meteorological Department’s forecast of monsoon rainfall at around 90% of the long-term average, the prolonged US-Iran conflict, FPIs’ heavy selling, and the MSCI Rejig that lowered India’s weightage.
The focus will be on the upcoming RBI meet, which will be released on Friday.
Besides, the US Bureau of Economic Analysis has revised first-quarter US GDP growth downward to 1.6% annualised from the earlier estimate of 2.0%, highlighting moderation in economic momentum.
Markets remained and will remain volatile amid continued uncertainty around the timing of a potential US-Iran deal and the reopening of the Strait of Hormuz (SoH).
“The focus is now shifting to the RBI MPC decision slated for 5-Jun.
The significant improvement in India’s outlook for the external account over the past two weeks, driven by 22% correction in Brent crude prices on hopes of a US-Iran deal, obviates the need for a rate hike.
We expect the RBI to remain on hold next week, which is positive for the consumption recovery story and the earnings cycle,” said Emkay Global Research.
Meanwhile, Gift Nifty at 23,725 signals a flattish opening.
Global stocks in the Asia-Pacific region are up in early trading on Monday.
Korea’s Kospi surged nearly 4 per cent while Taiwan’s gained 2 per cent.
Key economic data and RBI policy in focus Factors to watch....
