Markets to open flat to negative; sentiments to be driven by policy speculation

Indian markets witnessed a range bound volatility after hitting new highs at the opening itself. Finally, both Nifty and Sensex closed marginally up with nearly 0.3 per cent gains. Energy sector led the up move with more than 1 per cent gain while PSU Banks' sector was the only one to close in red with 0.3 per cent losses.

US markets closed lower despite rise in oil prices, wherein investors awaited the retail sales data which is to be released during the week. Dow remained 0.08 per cent down and S&P500 fell 0.09 per cent. Nasdaq too slipped 0.15 per cent.

European markets closed mostly higher amid strong performance from the banks and mining stocks. DAX remained up by 0.63 per cent and CAC40 too closed flat to positive with 0.11 per cent gains. Moreover, FTSE100 jumped 0.23 per cent.

Asian markets opened higher, wherein investors are expecting some positive outcome from China’s inflation data and RBI policy announcement. Japan’s Nikkei 225 is 0.11 per cent up. Hang Seng is marginally down with 0.32 per cent. However, China’s Shanghai Composite remains flat to positive with 0.15 per cent gains. Australia’s S&P/ASX 200 index is flat. New Zealand’s S&P/NZX 50 is 0.25 per cent up. South Korea’s KOSPI is 0.22 per cent up.

Indian markets have almost formed a Doji that suggested volatility ahead of RBI policy review. SGX Nifty is trading flat at 8735 levels. Governor, Raghuram Rajan is expected to keep the rates unchanged in his last policy announcement. We expect the markets to open in an indecisive manner and be propelled after the announcement.