RBI policy meeting, crude oil price among factors that could propel Nifty this week
New Delhi: Despite mixed global cues, domestic equity benchmark indices posted strong gains and closed at week highs. A sharp fall in crude oil prices coupled with improving foreign inflows supported the sentiment.
Now, with the start of the new financial year, the market will be eyeing the outcome of RBI’s monetary policy review to be held on April 8. Analysts expect a status quo. However, the central bank’s comments on inflation and growth will be significant amid global tightness.
On the macro front, participants will be eyeing the PMI data for manufacturing and services on April 4 and April 6 respectively. In the midst of all this, updates on the Russia-Ukraine war, global cues like crude oil movement will also be looked into.
“Markets are largely in sync with their global counterparts and the rebound may be further fueled by positive developments on the Russia-Ukraine front. In addition, we expect stock-specific moves on earnings expectations,” said Ajit Mishra, VP Research, Religare Broking.
The following factors will be important in guiding the market this week:
RBI policy meeting
Members of the Reserve Bank of India’s Monetary Policy Committee (MPC) will probably have the toughest task in the country when they meet from April 6 to 8 to determine the future course of policy rates. Rising inflation is putting pressure on the committee to tighten the money supply, but this could stall the economy’s recovery. Whatever its decision on Friday, the reaction of the market will definitely be there.
crude oil prices
Crude oil prices have declined over the past few weeks but they remain above $100 a barrel. Persistently high prices are the biggest threat to the economy and margins of companies that use it as a raw material for their products and services. The market will keep an eye on how the prices move further during the week. Further increase in prices will be negative.
Q4 Earnings
A select few companies will announce their March quarter figures during the week, but most of them are small companies. Meanwhile, traders will start positioning themselves for the earnings season, which will pick up when TCS announces its numbers on April 11.
PMI data
The Purchasing Managers’ Index, a key measure of demand at the factory level, will also be tracked by the market as it will give an indication on the overall demand trend in the country, especially when many companies have moved up prices.
Tech Outlook
Despite weak global markets, the market posted some gap-up candles last week and closed in the green. The Nifty has found a cushion around the 17,000 level after trading in a limited range last week.
“The short-term trend remains bullish, with the benchmark successfully breaking above 17,500. Thus, we suggest traders maintain a bullish bias, targeting a retest of the immediate resistance area near the 17,800 level. Yash Shah, Head of Equity Research, Samco Securities said, downside downside is likely to be near the 17,000 level.
