RBI policy key for stock markets this week: analysts

Looking at the upcoming monetary policy, a 25 bps may not surprise he market, while a 50 bps may infuse a new lease into bulls

Stock markets are likely to see range-bound trading this week in view of RBI's monetary policy review on Tuesday, with analysts widely expecting the central bank to cut interest rates by 0.25%.
 
"It was quite a volatile week for the Indian markets that saw Sensex dropping most in two weeks before rising again on back of rate cut hopes. RBI's policy review is likely to decide directions for the markets this week and expect range-bound movement ahead of the policy," said Aditya Trading Solutions (ATS) Founder Vikas Jain.
     
A 25 basis points cut may not surprise the market, while a 50 bps may infuse a new lease of life into bulls, he added.

     

Experts said the policy review will set the trend for the markets this week.

In the case of manufactured goods, inflation moderated to 4.51% in February, compared to 5.82% in the same month previous fiscal making case for easing of the monetary policy by RBI in its mid-quarter review on March 19.
     
However, overall inflation increased marginally to 6.84% in February driven by costlier food items and petrol.
     
According to Motilal Oswal AMC, Senior VP & Co-Head Equities, Taher Badshah: "A 25 bps cut in repo rates is expected on Tuesday. Overall, strength in global markets led by a strengthening US economy and rising appetite for risk assets and currencies will also likely reflect positively on emerging markets including India."

     
"This week, 5,925 shall be crucial deciding level in near term for Nifty and the index is likely to witness further buying above this level," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
     
The BSE 30-stock index, Sensex, fell by 255.67 points or 1.29% to end the week at 19,427.56.