BSE Sensex up 100 points ahead of RBI policy announcement

The benchmark BSE Sensex was trading in the green ahead of the Reserve Bank of India's second bi-monthly policy meet this fiscal. At 1027 hours, Sensex was at 26,877.01, up 99.56 or 0.37% from the previous day's close. 

In his second-last policy meet before term-end, experts say that the RBI Governor is expected to keep the repo rate unchanged after it was cut by 25 bps in the last policy meet. The reason for status quo? The brexit referendum, a decision on US Federal reserve rate hike, rising inflation in the domestic market, a surprise uptick in oil prices, to name a few. 

However, Raghuram Rajan has surprised markets in the past. All eyes will be on the RBI policy announcement at 11 am for further direction in equities.

Domestic markets were also firm on Tuesday gaining support from Asian equities that hit a five-week high. 

"Asian stocks hit a five-week high on Tuesday after US Federal Reserve Chair Janet Yellen gave a largely upbeat assessment on the US economic outlook, while the dollar declined on diminishing expectations of interest rate increases in coming months. MSCI broadest index of Asia-Pacific shares outside Japan rose 0.5%, taking its gains to 6% in two weeks, as investors judged the Fed's cautious stance as well-suited to equities," a Reuters report said.

Rising for the fourth straight day, the rupee strengthened by 7 paise to 66.90 against the US dollar in early trade at the Interbank Foreign Exchange market on Tuesday on sustained selling of the American currency by banks and exporters, a PTI report said.