Stocks likely to open on firm note

SGX Nifty:

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 79 points at the opening bell.

Meanwhile, the Reserve Bank of India (RBI)`s rate-setting Monetary Policy Committee (MPC) meeting commenced on 8 February 2022 and the outcome would be announced on 10 February 2022. The RBI may hold its repo rate steady but an increase in the reverse repo rate is expected as part of a process to reduce the surplus liquidity poured into the markets earlier during the pandemic, as per reports.

On the political front, developments in the upcoming assembly polls in Uttar Pradesh, Uttarakhand, Goa, Punjab, and Manipur will be closely watched. Polls in all the five states will be held between February 10 and March 7 in seven phases. The counting of votes and the result will be declared on March 10.

Global markets:

Overseas, Asian stocks are trading higher on Wednesday, with stocks in Hong Kong leading gains regionally.

U.S. stocks rose on Tuesday as investors digested another batch of corporate earnings and awaited key inflation data later this week.

The US trade deficit surged to a record high in 2021 as imports increased sharply amid the restocking of shelves by businesses to meet robust domestic demand. The Commerce Department said on Tuesday that the trade deficit increased 27% last year to an all-time high of $859.1 billion. The deficit was at $676.7 billion in 2020.

Meanwhile, investors await the release of U.S. consumer inflation data expected Thursday for clues on how the Federal Reserve could react to the rising price pressures.

Domestic markets:

Back home, the domestic equity barometers ended with decent gains after a volatile session on Tuesday. The barometer index, the S&P BSE Sensex, added 187.39 points or 0.33% to 57,808.58. The Nifty 50 index gained 53.15 points or 0.31% to 17,266.75.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,967.89 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,115 crore in the Indian equity market on 8 February, provisional data showed.

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