Week Ahead: RBI Monetary policy, quarterly results to dictate trend

Last Updated: Sun, Apr 28, 2013 07:27 hrs

With investors eyeing the monetary policy review from the Reserve Bank of India, shares from interest rate sensitive automobile, banking and realty sectors will be in focus right through next week, again a trunacted one due to a holiday on Wednesday (Maharashtra Day).

The central bank is scheduled to state its monetary policy on Friday, 3rd May 2013. It is widely expected that the apex bank will announce a rate cut, following a substantial decline in Wholesale Price Inflation in March. While reviewing its monetary policy last month, the central bank had cut repo rate by 25 basis points. According to the data released by the government on April 15, 2013, the wholesale price index eased to 5.96%, its lowest level in 40 months.

While a 25 basis points cut looks imminent, there are expectations in some quarters that the central bank might go in for a bigger cut in policy rate this time around. If that happens, then the market will see some frenzied buying almost across the board.

Leading automobile and cement manufacturers will be releasing the sales and shipments data for April next week. Metal stocks will track April production data, which is also due for release during the course of the week.

In economic news, data on the country's manufacturing activity in April is due. The Markit Economics will release the HSBC India Manufacturing PMI on Wednesday (1 May). And the data on India's services sector activity in April will be released on Friday. In March 2013, the manufacturing sector saw a notable decline, falling to 52, after recording 54.2 a month earlier. The Services setor activity index had tumbled to a 17-month low in March.

On the results front, Bharti Airtel, IDFC, Kotak Bank, ACC, Ambuja Cements, Grasim Industries and Jaiprakash Associates will announce their quarterly earnings next week.

On the global front, the outcome of the European Central Bank's monetary policy meeting will make an impact on the market. Disappointing U.S. GDP data will render the mood somewhat cautious when trading resumes in Asian markets on Monday, and the Indian stock market may well track the trend for a while before shifting its focus on domestic news.

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