Markets to bounce back on Yellen's comment

After posting losses for two days, markets are likely to see a rebound as the US Federal Reserve chair, Janet Yellen, maintained a cautious tone regarding interest rate hikes.

Yellen stated that the rate of inflation in the US has not yet proven sustainable against the backdrop of looming global risks to the US economy and that the US central bank should proceed only cautiously to the policy adjustments. 

Meanwhile, some volatility is expected in markets ahead of the March series futures and options contracts expiry due on Thursday.

Read more from our special coverage on "MARKETS"

• Markets likely to open flat tracking mixed global cues
• Sensex drops 371 points to end at 1-week low; financials drag
• Sensex tanks over 350 points; Nifty slips below 7,600
• Buy Siemens, Infosys, says Chandan Taparia of Anand Rathi
• Volatility seen ahead of derivative expiry

Also, market players are anxiously awaiting the announcement of first bi-monthly monetary policy of the Reserve Bank of India (RBI) for FY16-17 amid clamours for a 25 bps rate cut.

GLOBAL MARKET

US markets closed firm with technology stocks displaying a spectacular rally, after Janet Yellen said it is appropriate for policymakers to proceed 'cautiously.' The S&P 500 and Dow Jones Industrial Average closed at their highest levels of the year 2016 so far.

Meanwhile, Asian markets are following the tandem after Federal Reserve chair Janet Yellen maintained a dovish tone to assuage worries about a near-term interest rate hike. Japan's Nikkei was the only loser as a rise in the yen against the dollar nudged the index down 0.3% while China’s Shanghai Composite and Hong Kong’s Hnag Seng gained 1.5% each.

CORPORATE NEWS

Tata Steel will remain in focus as it considers the sale of its entire UK business to stem heavy losses. According to media reports, the company’s European arm would now “explore all options for portfolio restructuring, including the potential divestment of Tata Steel UK, in whole or in parts”.

Sun Pharmaceutical Industries is likely to see an uptich after the drug major acquired 14 prescription brands from Novartis AG and Novartis Pharma AG in Japan for $293 million.

Nestle India is likely to hog limelight as it plans to launch new dairy products in the next couple of months as part of its strategy to cut dependence on Maggi instant noodles, according to media reports.

Pharma shares are likely to stay in focus as several drug makers including Lupin, have come under the scanner of the US Food and Drugs Administration (USFDA), which has raised concerns over the manufacturing practices followed by these companies. Natco and Alembic Pharma are the other firms to have come under the scanner in the past two days.

Reliance Defenc, a unit of Reliance Infrastructure, and Israel’s Rafael Advanced Defence Systems have agreed to set up a joint venture in the specialized areas of air-to-air missiles, air defence systems and large aerostats, according to media sources.

Ashok Leyland is likely to witness some buying after the company secured orders valued at Rs 800 crore from the armed forces.

Jindal Steel and Power Ltd (JSPL) is in advanced discussions with Japan’s Yamato Kogyo Co to sell up to 49% stake in its rail mill unit, according to media reports.