Inflation, RBI policy and Q4 earnings to keep trade volatile

Ahead of monthly inflation data and the RBI's monetary policy review, stock markets are likely to be volatile in an action-packed week that will witness Q4 corporate earnings of blue-chips like Reliance Industries, analysts have said.

Investors are keenly looking forward to the central bank's monetary policy review and it could be one of the trend-setters for the week ahead besides developments in the overseas markets, they added.

"Markets will now keenly wait to hear from RBI on Tuesday and trade on next week could open on a cautious note. Caution is likely to prevail early next week, given inflation is data due out on Monday, along with the ongoing corporate earnings," Sharmila Joshi Head Equity Fairwealth Securities said.

As these key events unfold, markets are expected to see bouts of volatility, brokers said.

Companies such as Castrol India (April 16), IFCI (April 17), HCL Technologies (April 18) and Reliance Industries (April 20) will announce their quarterly results this week.

"These results will be keenly watched and will have a further bearing the markets," a market expert said.

Bonanza Portfolio Research Analyst Shanu Goel said, "After Infosys results outcome sentiments have worsened not only for the IT counters but for the general market as such. Monthly WPI inflation figure for March and RBI policy will influence the short-term trend of the market."

Marketmen said there is increasing probability of monetary easing by RBI in the upcoming monetary policy.

Last week, sluggish global markets, drop in industrial growth, earthquake in Indonesia triggering tsunami fears in the Asian region and a discouraging start to the quarterly result season after disappointing performance from IT bellwether Infosys soured investor sentiments.

The BSE benchmark index Sensex fell 2.23% while the Nifty lost 2.17% for the week ended April 13.

Industrial production grew at a slower-than-expected 4.1% in February, as against 6.7% in the same month last year.