Indian share markets are presently trading marginally higher. Sectoral indices are trading on a positive note with stocks in the consumer durables sector and realty sector witnessing most of the buying interest.
The BSE Sensex is trading up 60 points (up 0.2%), while the NSE Nifty is trading up by 24 points (up 0.2%). The BSE Mid Cap index is trading up by 0.4%, while the BSE Small Cap index is trading up by 0.8%. The rupee is trading at 64.35 to the US$.
Indian share markets are trading on a volatile note today. Most of this volatility is seen ahead of the Reserve Bank of India (RBI) monetary policy review this week. Volatility is also seen on the back of release of some key macroeconomic data and updates on monsoon rains.
As per the consensus, the RBI will most likely hold interest rates in its monetary policy review this week. However, it is expected that the Monetary Policy Committee (MPC) of central bank may lower its inflation forecast.
The RBI has projected inflation to average 4.5% April and September, and 5% in the latter half. However, as has been seen from the recent data releases, India’s retail price gauge has dropped to a record low of 2.99% in April. This was seen because of the base effect and lower food prices during the month of April.
However, market participants will look forward to RBI’s commentary on inflation. This is because the implementation of GST and monsoon are about to have an impact on the inflation trajectory in the coming months.
In the news from global financial markets, a senior official at the International Monetary Fund (IMF) said that China’s credit growth, among other things, could pose a risk to Asia.
As per the IMF, a lack of clarity about the size of an expected US fiscal stimulus and China’s rapid domestic credit growth are among risks that cloud Asia’s economic outlook.
The above comments come days after ratings agency Moody’s reported that China’s structural reforms will not be enough to arrest its rising debt. It also said that another credit rating downgrade for the country is possible if the country doesn’t get its ballooning credit in check.
