Indian Markets likely to follow global markets on Wednesday

Anuj Anandwala, analyst, KJMC Capital Services said that markets were choppy today (Jan 29). Market opened with an upward gap, following the good global cues but could not sustain the gains and was trading flat during the end of the trading session. It was mainly due to unchanged interest rates by the Central bank of India, as market expectation was a rate slash of 25 bps.

Most of the interest sensitive sectors dragged the market down. Banking and realty ended in red. Auto stocks were badly hit, though FMCG and Oil & gas were trading firm.

He expects markets to take cues from global markets in the next trading session as Fed meet is scheduled for tomorrow (January 30).

He recommends investors to do some value buying in IT sector.

Sunil Godhwani, CEO, Religare said that RBI has kept Bank Rate, Reverse Repo Rate, Repo Rate and Cash Reserve Ratio (CRR) unchanged. The governor has been concerned about the inflation, which RBI believes is `artificially` suppressed.

He also added that while non-food credit has decelerated, growth in money supply and aggregate deposits of scheduled commercial banks continues to expand well above indicative projections, which kept RBI maintain the interest rate.

He stated, `` We believe RBI statements are cautious to neutral and there is scope of cut in the rate going forward.``

According to him, most of the rate-sensitive sectors, including those, which went up yesterday anticipating a rate cut, have given up their gains of yesterday.

Investors will be better off if buying decisions are based on fundamentals and not on any event. He continues to like banks, as their fundamentals remain strong irrespective of a rate cut, said Godhwani.