The stock market in India is likely to trade with caution in the first hour of trade as series of events are likely to impact the investors’ sentiments. The Reserve Bank of India, after three days of the meeting, will announce its assessment of the economy and monetary policy. The Supreme Court will pronounce its judgement on Amazon – Future Retail deal. The market will also react to the government’s move of abolishing retrospective Income Tax provision on buying and selling of assets outside India.
For two days, the benchmark indices are scaling new highs but the broader market is down on profit selling, implying a cautious approach by investors at record high levels. The Nifty Futures trading in Singapore is up by 9.50 points at 16,320 against the close of 16,290 in India, indicating a firm start. The stock market in Asia are trading with a downward bias as firmness in the US dollar and 10-yr American bonds indicates staying away from the riskier markets.
Though certainly, RBI is not likely to announce any change in the benchmark rates, the commentary on the economy and inflation will decide the moves in the market. Amendment in Income Tax Act will support shares of Vodafone Idea, Vedanta and overall investor sentiments as it had dented investors’ sentiment for years.
The biggest news, however, would come from the Supreme Court as it is going to announce its verdict on Amazon’s challenge against Future Group’s $3.4 billion deal with Reliance Industries. The decision will be closely watched by traders for any buying and selling opportunities in shares of Reliance as well as listed entities of the Future group.