Bank Nifty is flat ahead of RBI’s mid-quarter monetary policy review. Experts expect 25 basis points hike in repo rate and hawkish commentary from RBI.

Ahead of the Reserve Bank of India’s mid-monetary policy today, Leif Eskesen, chief economist-India & ASEAN, HSBC says the central bank is likely to hike key rates by 25 bps though he has not completely ruled out the possibility of a 50 bps rate hike as well.

In an interview to CNBC-TV18, Eskesen says the market has already factored in the 25 bps repo rate hike and would be surprised if RBI either does not take any action or goes far more aggressive than expected.

He expects RBI Governor Raghuram Rajan to maintain a hawkish stance and continue to treat inflation as their main concern.

Going ahead, Eskesen does not see key inflation number CPI turning around, though he believes the WPI inflation will remain relatively stable around current levels over the next couple of months.

US Court said the company’s generic version of Trizivir does not infringe any patent. Lupin has already received approval for the drug and is first to file on it. It will be entitled to 180 days exclusivity.

The drug is expected to contribute USD 20-25 million in the exclusivity period to the company.

Morgan Stanley is overweight on Biocon and raised target price by 23 percent to Rs 482 apiece, citing improving base business and progression of biosimilar portfolio for global markets. The stock was trading at Rs 404.60, up 3.04 percent over previous close on the BSE.

Equity benchmarks extended gains in morning trade with the Sensex rising 100 points amid volatility, supported by index heavyweights Reliance Industries and HDFC twins.

The Sensex climbed 110.46 points or 0.54 percent to 20,722.60, and the Nifty rose 33.30 points or 0.54 percent to 6,172.35. Advancing shares outnumbered declining ones by a ratio of 752 to 372 on the BSE.

Market has already factored in a 25 basis points repo rate hike and the Reserve Bank will most likely do just that. But the important thing to watch out for will be the RBI commentary on inflation, says

Tirthankar Patnaik, EVP – Institutional Sales, Religare Capital Markets. He expects RBI to maintain its hawkish stance in the near term.