Mumbai, Aug 3: The Reserve Bank of India’s (RBI) three-day Monetary Policy Committee (MPC) meeting — led by Governor Sanjay Malhotra — begins on Monday with investors and economists closely tracking the central bank’s assessment of inflation, economic growth and the future interest rate trajectory ahead of the policy decision due on August 5.

The policy announcement is expected to provide cues on the outlook for interest rates, liquidity conditions and the broader economy amid an uncertain global environment.

Many analysts expect the six-member MPC to keep the policy repo rate unchanged at 5.25 per cent after maintaining the status quo in its June meeting.

According to SBI Research, the RBI is likely to leave policy rates unchanged as consumer price inflation is expected to remain above 5 per cent over the next two quarters, while domestic economic activity has shown signs of strengthening.

The report said Q1 FY27 GDP growth could exceed 7 per cent, higher than earlier estimates.

It further stated that an explicitly dovish message from the central bank appears unlikely in view of oil price volatility, pressure on the rupee and caution over external capital flows.

However, the report noted that domestic fundamentals have improved helped by strong capital inflows in July, a recovery in foreign exchange buffers, better monsoon conditions and near-normal reservoir levels.

Additionally, at its previous policy review in June, the RBI had unanimously retained the repo rate at 5.25 per cent and kept its policy stance neutral.

The central bank also revised its FY27 GDP growth forecast to 6.6 per cent amid geopolitical tensions.

Markets will also closely watch the RBI’s commentary on inflation risks, growth prospects and global developments for signals on the future course of monetary policy.

Mumbai, Aug 3: Indian equity markets traded higher on Monday as benchmarks rallied up to 1 per cent in morning trade, supported by broad-based buying across banking, FMCG and metal stocks amid easing crude oil prices, sustained monsoon progress and renewed foreign fund inflows.

Sensex surged 800 points or 1.02 per cent to an intraday high of 78,895.10 in early deals, while Nifty climbed 192.85 points or 0.79 per cent to 24,576.45.

Sector-wise, FMCG, metal, cement and banking shares led gains, with Nifty FMCG, Nifty Metal, Nifty Chemicals, Nifty Cement, Nifty PSU Bank and Nifty Private Bank indices rising up to 1 per cent.

However, media, pharmaceutical and healthcare stocks remained under selling pressure, with Nifty Media, Nifty Pharma and Nifty Healthcare falling up to 1.6 per cent.

Broader markets also witnessed buying interest, with Nifty Microcap 500 and Nifty Smallcap 100 advancing about 1 per cent.

According to analysts, the market appears poised for a breakout above the 24,500 level on the Nifty, aided by falling crude oil prices, favourable monsoon progress and foreign institutional investors turning net buyers.

Resilient economic growth despite global headwinds, credit growth running above 18 per cent, healthy automobile sales and better-than-expected first-quarter earnings indicate that FY27 earnings growth could surpass earlier estimates, they said.

The market experts further noted that strong inflows through FCNR(B), ECB and OFCB routes have helped stabilise the rupee, facilitating the return of foreign investors.

From a derivatives perspective, Nifty’s near-term trading range remains well defined. Significant ‘PUT’ open interest around the 24,400 strike continues to provide a strong support base, while heavy ‘CALL’ writing near 24,600 is expected to cap near-term upside, according to the experts.

Meanwhile, the immediate support is placed at 24350, backed by a concentration of PUT open interest, indicating that traders expect Nifty to remain largely range-bound.

A sustained hold above 24,350 would support a mildly bullish bias, while a break below that level could weaken sentiment.

Meanwhile, Brent crude — the global oil benchmark — plunged more than 5 per cent to $83.31 a barrel, while US West Texas Intermediate (WTI) crude declined nearly 7 per cent to $78.78 a barrel which also provided further support to market sentiment.

New Delhi, Aug 2: Pakistan and Bangladesh are among the Asian economies most exposed to the fallout from the prolonged US-Iran conflict, as surging global oil prices threaten to push up inflation, strain public finances and intensify pressure on already fragile economies, according to economists and research firms.

Both countries depend heavily on imported fuel, making them particularly vulnerable to sustained increases in crude oil and diesel prices, according to a report by South China Morning Post.

Analysts warn that limited fuel inventories and weak economic buffers could allow higher global energy costs to feed quickly into domestic prices, raising the cost of transport, electricity and food for millions of households, the report said.

Jamus Lim, Associate Professor of Economics at ESSEC Business School Asia-Pacific cited by the report, said Pakistan and Bangladesh are likely to face significant inflationary pressures in the near term.

He noted that limited inventory buffers mean the impact of higher oil prices would be transmitted relatively quickly through their economies.

Oil markets have already reflected growing concerns over the conflict. Brent crude has climbed sharply over the past month, while US benchmark West Texas Intermediate (WTI) has recorded similar gains.

Diesel and other refined fuel products have also posted double-digit increases, adding to concerns over rising energy costs worldwide.

The risks have extended beyond the Gulf region after a drone strike targeted gas vessels at Egypt’s Mediterranean port of Damietta, heightening concerns over shipping routes linked to the Suez Canal, one of the key pathways for Saudi oil exports.

For Pakistan and Bangladesh, another energy-price shock could place renewed pressure on currencies, fiscal balances and government subsidy programmes.

Both countries are implementing International Monetary Fund (IMF)-supported economic reform programmes that emphasise fiscal discipline, limiting their ability to cushion consumers from higher fuel prices through subsidies.

The conflict, now in its fifth month, has added to uncertainty after US President Donald Trump weighed further military action following Iranian attacks on American military assets in Jordan, Kuwait and Bahrain.

Oxford Economics has warned that several emerging markets, including Pakistan, Egypt, Mozambique, Nigeria and Kenya, face a combination of geopolitical risks, political uncertainty and rising debt-servicing costs.

According to the research firm, countries such as Pakistan, Mozambique, Kenya, Ghana and Tunisia, which have relatively thin foreign exchange reserve buffers, could experience the sharpest deterioration if the conflict intensifies.