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RBI policy holds key to stock market this week

"For the week ahead, RBI (Reserve Bank of India) policy meet is the key event and market expects a status quo," said Vinod Nair, head of research, Geojit Financial Services.

Press Trust of India  |  New Delhi 

The will be driven this week by the RBI policy meet outcome after the upbeat numbers for the September quarter failed to cheer investors, according to experts.

The central is scheduled to announce the fifth bi- monthly policy of the current fiscal on December 6.


"For the week ahead, RBI (Reserve of India) policy meet is the key event and market expects a status quo," said Vinod Nair, head of research, Services.

Nair further said that elections in and Himachal Pradesh would also weigh on investor sentiment.

"Market will be anxious to see the outcome of polls," said Jimeet Modi, Samco Securities founder and chief executive.

The polling for the two-phase elections in will take place on December 9 and 14.

The announcement of Services Purchasing Managers' Index will also be in focus.

Reversing a five-quarter slide in Gross Domestic Product (GDP) growth, the bounced back from a three- year low to expand by 6.3 per cent in the July-September quarter as manufacturing picked up momentum and businesses adjusted to the new GST tax regime.

The growth in the second quarter of 2017-18 compares with 5.7 per cent expansion in the previous, April-June, period -- the lowest growth rate since the took charge. The growth was 7.5 per cent in the September quarter of last fiscal, 2016-17.

"The Q2 data suggest the worst impact of demonetisation & GST is over and the economy is expected pick-up in near future. Q2 results were better for the corporate and market anticipates a better performance in H2FY18, leading to upgrades," Nair said.

However, in the near term, investors will be cautious due to the concerns on domestic fiscal deficit and rising crude prices, he added.

Besides, according to Jimeet Modi, the possibility of US Fed increasing interest rate is likely to dampen the sentiment further.

"Global will also watch anxiously US Senate which will vote for tax legislation that aims to cut corporate taxes in America," Jimeet Modi said.

The BSE Sensex recorded a fall of 846.30 points, or 2.51 per cent last week and the NSE Nifty declined 267.90 points, or 2.57 per cent.

First Published: Sun, December 03 2017. 14:50 IST
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