Monetary policy announcement of Reserve Bank of India (RBI).

     Today, the start is likely to be a bit cautious and traders will be eyeing the monetary policy announcement of Reserve Bank of India (RBI). The central bank is likely to keep rates unchanged keeping in mind the food inflation and a poor monsoon. Meanwhile, giving some respite, Finance Secretary Arvind Mayaram has said that though achieving fiscal deficit target of 4.1 per cent is a “tough task” but the government will be able to meet it, as there are “clear signs” of economy picking up, leading to buoyancy in revenue realisation. Today, there will be buzz in the companies having insurance business, as after the continued logjam in passing of Insurance Bill, Finance Minister Arun Jaitley has said that the government is open to minor modifications in insurance Bill for its passage in the current session of Parliament. On the other hand the power stocks are likely to remain under pressure on report that twenty-two coal-based power plants monitored by Central Electricity Authority were reeling under fuel shortages.

     Indian equity benchmarks staged an enthusiastic performance on Monday, by rallying around a percentage point and breaking lots of psychological levels in their northward rally. Sentiments remained positive since beginning of the trade and there appeared not even an iota of profit booking in the session as the benchmarks managed to fervently gain from strength to strength as investors continued hunt for fundamentally strong but oversold stocks. Sentiments remained jubilant on report that overseas investors have invested $6 billion into the Indian securities market in July 2014 taking their overall net inflows since the beginning of 2014 to more than $26 billion, driven by an investment-friendly government at the Centre. Rally in software and technology counters too aided the sentiments on the back of upbeat US economic data as they earn most of their revenues from exports to the US. Meanwhile, investors keenly awaiting the Reserve Bank of India (RBI) monetary policy meeting scheduled for August 5th to get further clues about futures policy rate moves. Though, RBI is expected to keep status-quo on the interest rates. Buying got intensified in last leg of trade after European markets edged higher in early deals after Portugal prevented the collapse of one of its biggest banks, while Asian markets too ended the session mostly in the green. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Frontline indices managed to settle near intraday high levels with Sensex surpassing its crucial 25,700 bastion and Nifty ended above its crucial 7,650 mark. Meanwhile, auto shares remained on buyers’ radar on the back of upbeat sales growth in the month of July. 
     Finally, the BSE Sensex surged by 242.32 points or 0.95%, to 25723.16, while the CNX Nifty soared by 81.05 points or 1.07%, to 7,683.65.