RBI’S policy meet will decide fate of markets

DESPITE THE non-functioning of the Parliament due to differences between the ruling coalition UPA and the opposition, the week ended saw markets rally on expectations of rate cut at the forthcoming RBI policy meeting.

Both the benchmark indices, the Sensex and the Nifty, closed 1.5 higher at 19,287 and 5,871.

Renewed buying from FIIs forced short sellers to cover positions during settlement of April series.

Optimistic statements over the GDP growth from the Prime Minister’s Economic Advisory Council kept the markets in good ‘mood’.

Disappointment over non-passage of bills in the Parliament may trigger correction, feel observers.

Rumors that the ruling coalition will go for a snap poll after the results of Karnataka elections are doing rounds.

Trade lightly till the end of parliament session, caution punters.

Coming week is news heavy with US Fed rate decision on 1st May, ECB meet on interest rates on May 2 and the RBI policy meet on May 3.

With markets closed on May 1, trading activity may be subdued ahead of the RBI meet.

For the week ahead, chartists predict trading range of 19,000-19,500 for the Sensex and 5,760-5,975 for the Nifty.

Short-term supports for the indices are at 19,125 and 19,000 and 5,810 and 5,765. Short-term targets on the upside are at 19,400 and 19,550 and 5,925 and 5,975.