The Reserve Bank of India (RBI) is all set to announce its conclusion on Thursday, August 10, after three-days meeting. Experts believe that the central bank will maintain a status quo on rates and monetary policy stance and hence it will not have any significant impact on the Indian stock market.

Economists, as cited by Livemint, expects MPC to keep the repo rate unchanged at 6.5% and retain the stance of withdrawal of accommodation. However, the market is pencilling in a 50% chance of 25 basis points (bps) hike over the next two RBI meetings.

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"The upcoming MPC policy will see the RBI reiterating caution amid a spike in perishable food prices, even as easing core inflation and possible mean reversion in food price trends in Q4CY23 would keep the RBI on hold, with a focus on the durable elements of inflation," Madhavi Arora, Lead Economist at Emkay Global Financial Services, was quoted as saying by Livemint.

ASSOCHAM Chamber Secretary General Deepak Sood said, '' It looks like a pause situation when it comes to policy interest rates, given some pressure in prices of food articles which we expect should abate in the next few months. Besides, the global macro picture also may work as a key factor to keep the rates unchanged.”

The Indian stock market is expected to be neutral since a status quo by the RBI is already factored in. However, it can witness some swings if there is a sharp revision in the inflation forecast.

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"The market may remain neutral if the RBI MPC maintains a status quo. Rate-sensitive sectors like banking, auto and realty also may not see a bounce since they have already clocked strong gains in the recent past. If the RBI says it is ready to cut rates in the near future, these sectors may see fresh buying," G. Chokkalingam, Founder & Head of Research at Equinomics Research, was quoted as saying.