Edited by: Namit Singh Sengar
Last updated: February 06, 2023, 8:25 AM IST
A man looks at a screen across a road with the Sensex on the facade of the Bombay Stock Exchange (BSE) building in Mumbai, (File photo/Reuters)
In its December monetary policy review, the central bank raised the key reference interest rate (repo) by 35 basis points (bps)
Equity markets’ attention will shift to the RBI interest rate decision scheduled for this week, with investors also following ongoing third-quarter earnings, global trends and the trading activity of foreign funds for further guidance, analysts said.
Brent crude oil prices and rupee dollar movement would also determine the trends in the market.
The RBI policy, the outcome of which is scheduled for February 8, will be a critical domestic event, Pravesh Gour, Senior Technical Analyst, Swastika Investmart told MOT.
This week will release Q3 earnings from companies such as Bharti Airtel, Hero MotoCorp, Hindalco and Mahindra & Mahindra, as well as macroeconomic data from the United States.
Industrial production data for December is expected to be released on Friday after close.
“We expect volatility to remain high this week as we have key events and data lined up. First, the participants will look at the outcome of the RBI policy meeting scheduled for February 8. On the economy side, IIP data will be revealed on February 10,” MOT quoted Ajit Mishra, VP – Technical Research, Religare, as saying.
In terms of earnings, major companies such as Tata Steel, Adani Ports, Ambuja Cement, Bharti Airtel, Hero Motocorp, Hindalco, Lupine and M&M will release their numbers during the week, along with several others.
In its December monetary policy review, the central bank had raised its key benchmark interest rate (repo) by 35 basis points (bps) after three consecutive 50 bps hikes.
With retail inflation showing signs of easing and the US Fed moderating the pace of its benchmark interest rate hike, the RBI is likely to settle for a smaller 25 basis point repo rate hike in its upcoming two-month monetary policy.
Kotak Institutional Equities says in a report that the global inflation environment is gradually improving, although inflation is still well above the target of each central bank. Inflation is likely to ease further in the coming months, leading to the end of the rate hike cycle by the first half of 2023 and potential rate cuts in late 2023/early 2024.
Since May last year, the RBI has raised short-term lending rates by 225 basis points to contain inflation, mainly due to external factors, most notably the global supply chain disruption following the outbreak of war between Russia and Ukraine.
For the week ending Feb. 3, the 30-stock BSE benchmark rose 1,510.98 points, or 2.54 percent.
Recently, RBI Governor Shaktikanta Das, speaking recently at the 22nd annual FIMMDA-PDAI conference, said that with some easing of COVID-related restrictions and cooling of inflation in several countries, although still high, central banks have started what is a pivot seems to be in the direction of lower rates of walks or breaks.
(with input from PTI)
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