Sensex, Nifty to open on a weak note

The late sell-off on Tuesday is set to keep the selling pressure on at start. Nifty will attempt a recovery near the 7400 levels. US stock indices tumbled on Tuesday, as weakness in Energy and Financial companies offset strength in Google parent Alphabet toy maker Mattel, and fashion retailer Michael Kors.

RBI decided to keep repo rate unchanged at 6.75%, along expected lines. Rise in food prices, concerns over the progress of fiscal consolidation and a challenging global environment are key reasons cited in the policy. Meanwhile, the Central bank will continue with daily variable rate repos and reverse repos in order to smooth liquidity. Consumer inflation has moved higher during past five months. RBI has targeted 5% inflation by end of March 2017 but trajectory of oil prices, currency movement, monsoon and inflation resulting from hike in salaries and pensions of Central Government employees (not accounted for in current projection) hold the key.

The late sell-off on Tuesday is set to keep the selling pressure on at start. Nifty will attempt a recovery near the 7400 levels. The rupee could drop below the 68 mark versus the dollar today. The heartening news amidst the gloom is that China’s services sector expanded the most in six months. The Caixin-Markit services PMI was at 52.4 in January, up from 50.2 in December. Metals, oil & gas, power, healthcare and auto stocks were among the major losers on Tuesday and they could see sell-off again. Mid-cap and small-cap stocks are also bearing the brunt. Key results today include Bajaj Finance, CCL Products, Gateway Distriparks, Hexaware Technologies, Dish Tv, KEC International, La Opala, Lakshmi Machine, Mangalam Cement, Orient Cement, Meghmani Organics, Pfizer, TD Power and Redington India.

The NSE may reportedly announce a re-balancing of Nifty index in its semi-annual review later this month. Punjab National Bank, Vedanta, Hindalco and Cairn India could move out says a report. IndiaBulls Housing Finance, Aurobindo Pharma, Indian Oil Corporation, Eicher Motors and Bharti Infratel are among those which stand a chance to be included, the report added.

US stock indices tumbled on Tuesday, as weakness in Energy and Financial companies offset strength in Google parent Alphabet toy maker Mattel, and fashion retailer Michael Kors.

Alphabet officially surpassed Apple to become the most valuable company in the world.

Meanwhile, crude oil futures fell below US$30 per barrel, down 5.5% on the day following a 6% slide on Monday.

The Dow Jones Industrial Average sank 295.64 points, or 1.8%, to end at 16,153.54. The S&P 500 index slumped 36.35 points, or 1.9%, to close at 1,903.03. The Nasdaq Composite index plunged by 103.42 points, or 2.2%, to settle at 4,516.95.

Days after Prime Minister Narendra Modi defended subsidies aimed at the poor, ET reports that the government is gearing up to announce a mammoth rollout of the National Food Security Act (NFSA) with an outlay at Rs 130,000 crore, will be double the number earmarked in this year's Budget.

Finance Minister Arun Jaitley favoured increasing public spending to boost the economic growth. India has been growing by 7-7.5 per cent, and for the country to accelerate, all sectors have to contribute, Jaitley reportedly said at the MGNREGA Sammelan-2016.

Yusuf Khwaja Hamied, currently the Non-executive Chairman of drug major Cipla Ltd, has increased his stake in the company to over 20% by acquiring additional 5% stake of his wife Farida Hamied.

Tata Motors is considering changing the name of its new Zica hatchback as global panic mounts over an outbreak of the identical-sounding Zika virus, the company reportedly said.