Mumbai: As the financial year 2017-18 starts on Monday, the markets are likely to focus on Reserve Bank of India (RBI) monetary policy review, macro economic data, monsoon forecast and March quarter earnings in the truncated week. Exchanges will remain shut for trading on Tuesday on account of Ram Navami.
Rakesh Tarway, head of research, Reliance Securities, said, “We expect markets to consolidate again during the next week. We expect a consolidation in the current week and sustenance above levels of 9,150 will be watched for the upmove.”
Rate sensitive stocks and the rupee are likely to react to the central bank’s monetary policy review decision on 6 April. According to a Mint survey, the RBI is expected to keep policy rates unchanged and retain its neutral stance. The RBI had left its key repo rate unchanged at 6.25% for the second time in its February 2017 meeting.
“Overall, we believe the markets to be volatile this week. RBI policy will be crucial to watch the step taken by the governor along with any development related to bad debt restructuring,” said Abnish Kumar Sudhanshu, director and research head, Amrapali Aadya Trading & Investments.
Analysts said foreign portfolio investment buying momentum may take a slight hit as long-pending General Anti-Avoidance Rule (GAAR) is implemented from 1 April, which will make harder for FIIs (foreign institutional investors) to avoid domestic duties by routing investments through tax havens.
Massive buying by FIIs took the markets to record highs in March, post the Bharatiya Janata Party’s win in the crucial state of Uttar Pradesh. According to data from share depository NSDL, FIIs bought a total of Rs11.79 trillion in FY17, 8.02% higher than what they bought in FY16. The Sensex and Nifty soared 16.88% and 18.55%, respectively in FY17.
State-owned oil marketing companies and aviation companies will react to the fuel price cut in the weekend. Auto stocks will be in focus after announcing March sales data. Nikkei India Manufacturing PMI data and Nikkei India Services PMI data will be released on 3 and 6 April, respectively.
Globally, investors will watch out for the US Federal Reserve’s minutes of its 14-15 March meeting in which it had hiked rates by 26 basis points. Also, US President Donald Trump is set to meet Chinese president Xi Jinping, which may keep investors on the edge.
