The markets are likely to be cautious as the new financial year kicks in on Monday. Macro data and monetary policy will give directions to equities this week. The markets are also expected to react to the fiscal deficit data announced after trading hours last week. As per data released by the Controller General of Accounts (CGA), fiscal deficit for April-February was 120% of the revised estimates on account of increased expenditure and subdued revenue receipts.
Jayant Manglik, president, Religare Broking Ltd, said the markets are currently trying to find balance but negative news flow has been derailing it. “We feel consolidation is more likely in such scenario. We advise preferring hedged positions and waiting for further clarity. Barring IT, almost all the sectors are showing mixed trend and thus require extra caution in stock selection,” he added.
One of the most important events this week is the monetary policy review by the Reserve Bank of India (RBI). The six-member Monetary Policy Committee (MPC), headed by RBI governor Urjit Patel, is to meet on 4 and 5 April. The central bank is widely expected to keep interest rates steady.
A UBS Investment Bank note, released on 28 March, by economist Tanvee Gupta Jain and strategist Rohit Arora said, “In its policy review scheduled for 5 April, we expect the MPC to maintain the repo rate at 6%. We expect the tone of the policy statement to remain cautious while maintaining a neutral policy stance. With growth trends improving and inflation surprising on the downside, we believe the balance of risks doesn’t require the MPC to change its stance.”
Meanwhile, auto stocks will be in focus after reporting sales data for the month of March. Maruti Suzuki India Ltd, the country’s largest passenger car maker, said March domestic passenger car sales rose 13.3% from a year earlier to 147,170 units, led by growth across segments. Read more
In the primary markets, auto component maker Sandhar Technologies will make stock market debut on Monday. The company’s Rs512 crore IPO was open during 19-21 March and was subscribed 6.2 times. The price band was fixed at Rs327-332 per share.