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US stocks retreated slightly on Thursday as investors paused after the Federal Reserve’s decision to keep its stimulus intact sparked a rally that lifted the Dow and S&P 500 to record highs. (Reuters)
Asian shares paused on Friday as investors sat back to ponder the US Federal Reserve’s policy outlook, a day after the world’s most powerful central bank triggered a global rally in riskier asset markets with an unexpected decision to maintain its stimulus.(Reuters)
The dollar drifted off a seven-month low against a basket of major currencies on Friday as investors unwound some of the bearish trades put on in reaction to the Federal Reserve’s shock decision to maintain its massive bond-buying stimulus.
[caption id=“attachment_1121801” align=“alignleft” width=“380”]  The dollar drifted off a seven-month low against a basket of major currencies on Friday. Reuters[/caption]
Gold was hovering near one-week highs on Friday and was on track for its biggest weekly gain in five weeks after the US Federal Reserve postponed the tapering of its bullion-friendly stimulus measures. Spot gold had eased 0.1 percent to $1,363.19 an ounce by 0018 GMT, not far from a one-week high of $1,374.54 hit on Thursday. It has gained nearly 4 percent this week.
US crude futures extended losses on Friday after a 1.5 percent drop the previous day after Iran’s president said his country was not seeking war with any other nation. Brent crude was at $108.5 per barrel, while Nymex crude was 105.
SGX Nifty futures on the Singapore Stock Exchange were flat at 6143 on Friday, indicating a flat opening for domestic shares ahead of the RBI’s monetary policy review.
Stocks in news
Bank stocks, as the RBI is to review its monetary policy statement for this year. Wide expectation is that the central bank will ease the latest liquidity tightening steps, which is likely to be a boost to these stocks.
Aviation stocks, after Tata Sons applied for licence to set up a new full service carrier in agreement with Singapore Airlines.
Ranbaxy Laboratories, after a report in the Business Standard that the company’s US plant is now under FDA lens.
Economy news
The RBI will review its monetary policy for this year around 11 am. According to Reuters, 50 of the 52 economists polled expect the policy repo rate to remain at 7.25 percent, and 47 of 48 respondents see the cash reserve ratio, or the portion of deposits banks have to maintain with the central bank, unchanged at 4.00 percent. Of 37 economists polled, 30 expect no change in the Marginal Standing Facility (MSF) rate or the rate at which banks access funds for emergency needs. The MSF rate was raised by 200 basis points in July as part of slew of cash tightening steps aimed at rescuing the rupee. Of 32 economists polled, 17 said they expect the RBI to retain the cash tightening steps, while another 28 out of 38 said they do not expect more measures to strengthen the rupee.
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