Nifty Likely to Open Flat to Higher; Banking Stocks in Focus

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Nifty Likely to Open Flat to Higher; Banking Stocks in Focus
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- Stock markets in the U.S. rallied as market players have now started to look beyond the surge in COVID-19 cases and pin their hopes on successful vaccines. The Dow Jones ended up 1.12% and the Nasdaq was up 0.22% on the day’s close. Dow, Nasdaq and S&P futures are also up 0.66%, 0.42% and 0.56% respectively.

Chicago Federal Reserve Bank President Charles Evans, while speaking to Iowa Bankers Association on Monday said, that there is still "quite a long ways to go" for the US to recover from the virus crisis. He also added that he doesn’t think that the Fed will raise interest rates from their current near-zero level until 2023 or 2024.

Nifty and BSE Sensex will probably follow world markets and open flat to higher. The last two trading sessions have seen indices opening in the green before the markets correct and recover later in the day. It will be interesting to see if the pattern continues today. Nifty Futures were trading at 12,989 or 0.4% higher at the time of this report.

Banking stocks ( Nifty Bank ) dropped yesterday on news that an RBI working committee has recommended that large business groups be allowed to run banks. Former RBI Governor Raghuram Rajan and former RBI Deputy Governor Viral Acharya don’t think this is a good idea as connected lending could lead to a higher number of bad loans and NPAs (non-performing assets). Investors can expect action in banking and financial stocks today as well.

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