All eyes on RBI: What you should know before the opening bell

FP Staff • December 21, 2014, 03:49:23 IST

Global cues: Asian shares and the dollar fell slightly in early trade on Tuesday, mired in recent ranges as investors wait for commentary from the U.S. Federal Reserve after this week’s policy meeting, where it is widely expected to keep policy on hold. Monday’s U.S. economic data offered nothing to alter this view. U.S. manufacturing output barely rose in September and contracts to buy previously owned homes fell the most in nearly 3-1/2 years, showing economic activity was on a weak footing even before a 16-day partial shutdown of the U.

All eyes on RBI: What you should know before the opening bell

Global cues:

Asian shares and the dollar fell slightly in early trade on Tuesday, mired in recent ranges as investors wait for commentary from the U.S. Federal Reserve after this week’s policy meeting, where it is widely expected to keep policy on hold.

Monday’s U.S. economic data offered nothing to alter this view. U.S. manufacturing output barely rose in September and contracts to buy previously owned homes fell the most in nearly 3-1/2 years, showing economic activity was on a weak footing even before a 16-day partial shutdown of the U.S. federal government that is expected to weigh on fourth quarter growth.“We expect little change in the Fed’s statement at the October FOMC meeting,” strategists at Barclays wrote in a client note.

The S&P 500 closed at another record high on Monday as expectations were high that the Federal Reserve will keep its stimulus in place when it meets this week.But the overall market was little changed, with the Dow and Nasdaq ending down slightly, after the recent sharp run-up in the stock market lost some momentum.

The dollar clung onto modest overnight gains early in Asia on Tuesday, but stayed near a nine-month trough as investors bet the Federal Reserve will this week set the course for its massive stimulus program to be maintained into early next year.The dollar index.DXY was steady at 79.344 after drifting up 0.2 percent on Monday. However, it remained not far off Friday’s 78.998 - a low not seen since February 1.

Business/Stock news:

India’s largest car manufacturer Maruti Suzuki surpassed analysts’ expectations on every parameter with second quarter (July-September) net profit growing 6 percent quarter-on-quarter (up 3 times year-on-year) to Rs 670 crore due to lag impact of currency benefits.

Reliance Industries Ltdwill also be in focus today. The petroleum minister has approved a proposal to take away five gas discoveries from the company in the KG D6 block.These blocks will now be reportedly put up for competitive bidding.

The harried NSEL Investor Forum, the umbrella group of investors of the crippled spot commodity exchange, today said it has filed a complaint against EY India with the Economic Offences Wing (EOW) of the Mumbai Police for its alleged role in the payment crisis. NSEL Investors Forum chairman Sharad Saraf told PTI the forum has filed complaint against E&Y.

Economy news:

The RBI is expected to raise policy interest rates for the second time in as many months on Tuesday to fight stubbornly high inflation, while rolling back further emergency measures put in place recently to support the slumping rupee.Despite the risks to an already sluggish economy, the Reserve Bank of India (RBI) is forecast to lift its policy repo rate by 25 basis points (bps) to 7.75 percent, according to 29 of 41 economists polled by Reuters.