Pre-market: Weak opening seen, eye on RBI policy

Markets are expected to post losses in opening trades as investors turn cautious ahead of RBI policy.  The Nifty futures on the Singapore Exchange slipped 32 points, at 5683.

Nifty closed below the 200 Daily Moving Average level of 5749 yesterday suggesting that bears have an upper hand on the technical charts.
Reserve Bank of India will announce its monetary policy at noon today and economists expect rate hike between 25-50 bps. The central bank may also warrant a hawkish stance going forward given the sticky inflation levels. Wholesale Price Index for 2010-11 is 8.9% which is way above the RBI's comfort level of 7%.

Edelweiss in the morning note said, "Nifty is placed below the crucial moving averages and RBI monetary policy could set the tone for markets the weeks to come."

Edelweiss recommends investors to buy at current levels as Nifty is close to the support of 5645 with a price objective of 5820-5900. "In case of a break below 5645 on closing basis investors should position for a deeper correction down to 5485," added Edelweiss.

Across Asia markets are largely trading in the red with only Hang Seng and Nikkei indices advancing. Major losses in morning session were posted by Seoul Composite down, 1.5%, Taiwan Weighted, Jakarta Composite and Straits Times lost 0.8% each. On the other hand, the Nikkei Stock Average zoomed 1.6%, crossing 10,000 level for the first time since the March 11 earthquake led by steady inflow of overseas funds. Property stocks pulled Hong Kong shares higher, up 0.2%.