Mumbai: The final Reserve Bank of India (RBI) monetary policy review for 2017-18, combined with earning results from India Inc. and the flow direction of foreign funds are expected to set the course of key equity indices in the coming week.

Market observers opined that other factors, such as the Indian rupee’s movement against the US dollar, global crude oil price fluctuations and developments on the economic reforms front will influence investors’ risk-taking appetite.

“Weak sentiments may remain in the market... as investors will closely watch each development of the monetary policy committee (MPC) meeting,” said DK Aggarwal, Chairman and Managing Director of SMC Investments and Advisors.

According to Vinod Nair, Head of Research, Geojit Financial Services, higher-than-expected fiscal deficit target for FY19 of 3.3 per cent, rising inflation and yield may push RBI to be more “hawkish” on interest rates in the upcoming monetary policy review.

The MPC is scheduled to meet on Feb.6 and 7, for the Sixth Bi-monthly Monetary Policy Statement for 2017-18. In its last review, the MPC had kept the key lending rate unchanged.

Apart from the monetary policy review, Union Budget 2018-19 announcements like the levy of LTCG (Long Term Capital Gians) tax and a higher-than-expected fiscal deficit target for 2018-19 will chart the trajectory of the equity market.

Indo-Asian News Service