Markets turn eyes towards RBI meet

Receding trade war fears after reports of possible trade negotiations between the US and China and government's announcement of lower- than- expected borrowing programme for the first half of the fiscal year 2019 have helped markets close higher during the week ended.

In the holiday shortened week, the Sensex rose 372.14 points to settle at 32,968.68 while Nifty rose 115.65 points to settle at 10,113.70. Outperforming the benchmark indices, the S& P BSE Mid- Cap index rose 268.48 points to settle at 15,962.59 and the S& P BSE Small- Cap index rose 193.18 points to settle at 16,994.36.

With Karnataka assembly elections on radar, the market will discount political news more than economic news from now. It can set the trend for the general election in 2019, say punters.

Long term capital gains exceeding ` 1 lakh from sale of shares will kick in from April 1, the beginning of FY19. The Budget had after a gap of 14 years reintroduced 10 per cent tax on LTCG exceeding ` 1 lakh from sale of shares.

The RBI is expected to keep rates unchanged for the rest of this year at its April meeting but shift to a hawkish stance by the end of this year and increase in interest rates is not ruled out as inflation pressures build up, say observers.

Near term trend will be dictated by the outcome of the RBI’s monetary policy meeting and macroeconomic data, developments in the Parliament, trend in global markets, investment by FIIs and DIIs, the movement of rupee and crude oil price movement.

For the week ahead, chartists predict trading range of 32,500- 33,500 and 9,950- 10,275 for the indices.