Investors turn cautious ahead of RBI’s monetary policy meeting

Nifty falls 42.95 points, while Sensex declines 312 points

FPJ News Service mumbai

Despite an optimistic market undercurrent, investors on Wednesday turned cautious ahead of the RBI’s monetary policy decision later this week and trade war concerns. The 30-share BSE Sensex declined 312.53 points or 0.40 per cent to close at 78,271.28. During the day, the index went lower by 367.56 points or 0.46 per cent to 78,216.25. The NSE Nifty dropped 42.95 points or 0.18 per cent to 23,696.30. The index moved between a high of 23,807.30 and a low of 23,680.45 during the day.

“At present, two factors are influencing the market trend. One, the market perceives the Trump tariff threats as negotiating tools, which might not lead to a full blown trade war. Two, the potential beneficial impact of the game changing Budget is slowly sinking in the market.

The most significant short-term positive for the market on February 4 was FIIs turning buyers (Rs 809 crore) in the cash market for the first time since January 2nd. It remains to be seen whether this will become a trend. The decline in the dollar index and the US bond yields are positive,” according to Dr. V. K. Vijayakumar, chief investment strategist at Geojit Financial Services.

Profit-taking after Tuesday’s rally and the rupee plunging to record low levels also hit market sentiment. Sensex had jumped 1,397.07 points and Nifty soared 378.20 points to settle at one-month highs on Tuesday following firm global trends. Adani Ports, IndusInd Bank, Tata Motors and HDFC Bank were among the major gainers. In Asian markets, Seoul and Tokyo settled in the positive territory while Hong Kong ended lower.