All eyes on RBI's policy outcome

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 12 points at the opening bell. The major event today, 4 October 2016 is the Reserve Bank of India's (RBI) fourth bi-monthly monetary policy meeting.

The RBI after the third bi-monthly monetary policy on 9 August 2016, decided to keep the policy repo rate unchanged at 6.5%. Consequently, the reverse repo rate remained unchanged at 6%. RBI also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4%.

The latest monetary policy meeting will be the first meet where the interest rate decision is taken by a panel. Urjit Patel, the RBI governor, will be one among the six-member Monetary Policy Committee (MPC) recently notified by the government.

In overseas stock markets, Asian stocks were trading on mixed note. US stocks closed lower yesterday, 3 October 2016 as investors digested key economic news and kept an eye on oil prices.

Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 34.22 crore yesterday, 3 October 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 198.02 crore yesterday, 3 October 2016, as per provisional data.

Interest rate sensitive banking, auto and realty stocks will be watched ahead of the Reserve Bank of India's (RBI) monetary policy meeting today, 4 October 2016. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. Purchases of both residential and commercial property are largely driven by finance.

Hero MotoCorp's total sales rose 11% to 6.74 lakh units in September 2016 over September 2015. The company registered highest ever sales in any month so far in September 2016. The announcement was made after market hours yesterday, 3 October 2016. The growth momentum was backed by a series of positive factors such as the successful market launch of the Splendor iSmart 110; augmented leadership in the 125 cc segment with the 'Glamour', emerging as the largest- selling 125 cc motorcycle in the country and the positive trend maintained by the new scooter portfolio.

Trading for October started on a buoyant note as key benchmark indices logged strong gains yesterday, 3 October 2016 led by gains in index heavyweights HDFC, L&T and Reliance Industries (RIL). The Sensex rose 377.33 points or 1.35% to settle at 28,243.29, its highest closing level since 28 September 2016.

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