Sensex, Nifty Seen Opening Slightly Up; RBI Decision Eyed

Indian shares may open flat to slightly higher on Thursday after the S&P 500 set a new record high overnight on bets that a U.S. resilient economy will continue fueling corporate profits.

The Reserve Bank of India (RBI) concludes a three-day meeting of the Monetary Policy Committee today, with analysts expecting no change in rates due to inflation nearing the upper tolerance level of 6 percent.

Benchmark indexes Sensex and Nifty fluctuated before finishing little changed on Wednesday. The rupee gained 9 paise to close at 82.96 against the dollar.

Asian markets traded mixed this morning before the Chinese New Year holidays.

China has replaced the head of its securities regulator in an apparent move to restore investor confidence and stabilize the stock market.

Data showed earlier today that Chinese consumer price inflation grew less than expected in January and producer prices continued to fall, adding to deflation worries.

Geopolitical tensions remained in focus, with Israeli Prime Minister Benjamin Netanyahu vowing to continue the fight against Hamas, now in its fifth month, until achieving “absolute victory”.

The dollar traded in a tight range in Asian trade and Treasuries were steady as more Fed officials indicated they don’t see an urgent case for lowering interest rates. Oil steadied after a three-day advance.

U.S. stocks rose overnight as strong corporate earnings outweighed investor anxiety over when the Federal Reserve could cut interest rates.

The Dow edged up 0.4 percent and the S&P 500 added 0.8 percent to set new record closing highs, with the tech-heavy Nasdaq Composite climbed 1 percent.

European stocks closed on a sluggish note Wednesday as traders weighed earnings, M&A news and hawkish comments from Fed officials.

The pan European STOXX 600 dipped 0.2 percent. The German DAX and the U.K.’s FTSE 100 both fell around 0.7 percent while France’s CAC 40 shed 0.4 percent.

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