Stock Market: Bulls take tentative steps; global cues turn better

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By S Jha

New Delhi, April 3: After Friday bull charge, the Indian equity markets were caught in an indecisive stage with positive bias. All eyes are now in the monthly monetary policy meeting of the Reserve Bank of India (RBI).

Consensus views expect a 25 basis point hike in the Repo rate by the MPC meeting of the RBI. This is despite the fact that a number of unofficial spokespersons of the ruling Bharatiya Janata Party (BJP) commentators on economic matters sought to build a case for pause in the rate hikes, and even accused the RBI of blindly copying the US Federal Reserve.

But the fact remains that the core inflation remains high and beyond the comfort level of the RBI, which is also not helped by the government’s stubborn approach in not cutting the retail prices of diesel and petrol, which could have substantially cooled down the inflation. The cereals still command strong prices, which again are putting pressure on the food inflation.

The Dow Jones was up by over 200 points in the afternoon trade on the back of the investors taking fresh position in the beginning of the second quarter there. Traders in the US also continue to keep their fingers crossed, for there are evident signs on the basis of manufacturing indices that the US economy continues to contract. The US economy is not yet out of the words, while the Federal Reserve is not yet likely to pause the rate hike spree given that inflations remains firm.

In the UK, the food inflation is still in the double digit. The breakfast basket of the people is badly hit in the UK, with products like milk, eggs, bread reporting sharp price spikes in the recent weeks.

Nifty gained 38 points to close a touch below the 17400 level. Bank Nifty was the most bullish of the index, closing with a gain of 204 points on Monday. Sensex gained 114 points. The stock markets will remain closed on Tuesday on account of Mahavir jayanti.

While the car manufacturers had rapped on Friday, it was the turn of two-wheelers on Monday as the likes of Hero Honda and Bajaj Auto gained strongly on the back of the best number of sales seen in the last month. Tejas Networks gained by over five per cent after bagging a contract of Rs 700 crores from BSNL. Several smalcaps and midcaps gained strongly on Monday.