Reuters Market Eye - The Reserve Bank of India's policy review on Tuesday and earnings of blue-chip companies will be the key factors for stocks next week.
Stock investors are widely anticipating a 25 basis point rate cut when the RBI sets policy on Tuesday, to be followed by another 25 bps cut in March, making the guidance provided by the central bank as important as the rate decision itself. (Read preview story http://in.reuters.com/article/2013/01/25/india-economy-interest-rates-rbi-idINDEE90N0HH20130125)
As a result, stocks could see a steep selloff if the RBI surprises markets by keeping key lending rate unchanged or by signalling a reduced scope of rate cuts ahead.
ICICI Bank Ltd
Volatility is also expected to increase as Thursday marks the expiry of January derivatives contracts.
FACTORS TO WATCH
Monday: RBI macro-economic report (5 p.m.); JSW Steel Ltd
Tuesday: RBI's review (decision at 11 a.m.); Reliance Capital Ltd
Thursday.: ICICI Bank, Lupin Ltd
Friday: BHEL and IDFC Ltd
(Reporting by Abhishek Vishnoi)