Domestic markets are likely to open flat, on Thursday, as all eyes are on RBI monetary meeting outcome. SGX Nifty at 17,600 indicates a flat-to-negative opening as Nifty futures closed at 17,622 on Wednesday.

Sharad Chandra Shukla, Director at Mehta Equities Ltd, said, “Despite efforts, inflation is still out of control. Inflation in India is still being pushed higher by fuel prices despite OPEC’s recent announcement to reduce oil production. Also, we continue to expect that the next policy will raise rates by 25bps due to the unseasonably early rainfall in some parts of the country that have an influence on the crops.”

Also read: Why RBI is likely to hike the policy rate, again

According to Mitul Shah - Head of Research at Reliance Securities, said, “Market will also take cues from the tone of the governor’s speech and the RBI’s revised forecasts for GDP growth and inflation for FY24.

However, analysts expect market to remain lacklustre due to a series of holidays ahead. According to them, the market may see profit bookings at a higher level.

“Technically, the resistance is seen in the range of 17,650-17,700 where we observe a falling trendline of the channel in which Nifty is trading for the last four months. Also, it coincides with a potential reversal zone of a bearish harmonic pattern named ‘Bearish Bat’. Hence, the index can witness a pullback move from the above-mentioned range as the hourly readings are oversold.”

Also read: Can policy rate hikes alone control inflation?

Mitul Shah further said, “Investors also await the earnings outcome of the March quarter, which will start trickling in from next week. While the Indian economy still has some macroeconomic bottlenecks, overall it has been resilient despite the turbulent global environment. However, rising Covid cases have raised concerns. Additionally, the impending recession in the US, -higher crude prices along with the prospect of a below-normal monsoon could act as headwinds for the Indian markets.

Meanwhile, global markets are mixed. US stocks ended on a mixed note with Dow ending higher, while Nasdaq was in red and S&P-500 closed marginally down.

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