*Morning comments (HDFCSec Retail Research)*

*All eyes on MPC*

*Indian markets could open flat to mildly higher, in line with mixed Asian and US markets on June 06*

Stocks closed mixed Thursday, after the European Central Bank cut rates for the first time in five years and as investors looked ahead to Friday's monthly jobs report to help gauge the strength of the U.S. economy.

Wall Street expects to see 190,000 new jobs in the May report, slightly up from April. The unemployment rate is expected to hold steady at a historically low 3.9%

Any upside or downside surprise could prompt investors to reassess their outlook for Fed rate policy. Many analysts eye September as the most likely time frame for a rate cut, assuming inflation continues to ease.

The European Central Bank cut rates for the first time since 2019. The move was expected but marks a significant change in the central bank's policy. Attention now turns to when the Federal Reserve will follow suit.

Monetary Policy Committee is likely to maintain status quo on the Reserve Bank of India's key lending rate amid the continuing need to bring down inflation further, even as economic activity remains strong. All economists polled expect the MPC to hold the Reserve Bank of India's repo rate steady at 6.5%. This will be the first RBI policy after the Lok Sabha election results 2024.

In corporate news, Wipro Ltd said it has been awarded a $500-million deal by a leading US communication service provider over a period of five years. Wipro shall provide managed services for some products and industry-specific solutions. RVNL had been awarded a contract worth Rs 495 crore by the NTPC. IRB Infrastructure Developers Ltd along with its associate announced a strong year-on-year toll revenue growth of 30% for May 2024.

Nifty extended its recovery for a second consecutive session on June 06 after the steep fall witnessed on June 04. Broad market indices rose more than the Nifty even as the advance decline ratio rose. The intra day volatility is falling over the past two days. Nifty could now stay in the 22419-23180 band for the near term. RBI Governor’s commentary on inflation and future interest rate cut trajectory will drive the markets in the near term.

Indian markets could open flat to mildly higher, in line with mixed Asian and US markets on June 06.