RBI policy review, Q1 results to steer Indian markets

Mumbai, India - The Reserve Bank of India’s (RBI) monetary policy review and the ongoing quarterly results season are expected to determine the trajectory of equity indices this week.

According to market observers, global geopolitical situation and macro-economic data points will also impact investors’ risk-taking appetite.

“RBI’s monetary policy review slated for this week is going to be one of the most important events that will influence the equity markets,” Devendra Nevgi, chief executive of Zyfin Advisors, told IANS. “Markets have already discounted the possibility of a 25 basis points cut. Investors will also look forward to the language and cues that RBI will give on the future inflation scenario and rate cut outlook.”

In its last review, the RBI had kept the key lending rate unchanged. However, deceleration in recent consumer and retail inflation data points has spurred expectations of a rate cut.

Apart from monetary policy review, quarterly earnings results will be the other major theme for the week.

Companies like Indian Oil Corp, M&M, Power Grid, Marico, Lupin, Titan, Punjab National Bank and Reliance Power are expected to announce their first quarter results during this week.

“Earnings have become very critical as the PE (price-earnings) ratio are exceeding the current earnings. In the near term earnings need to catch up with the PE ratios for the markets to move higher,” Nevgi explained.