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Stocks of automobile companies are seen tracking the broad market next week due to lack of share-specific triggers. Domestic indices will keenly eye the Reserve Bank of India's mid-quarter monetary policy review on Tuesday for cues. The central bank is unanimously expected to leave the repo rate unchanged as inflation continues to remain a concern. Around half of the poll respondents expect the RBI to cut Cash Reserve Ratio by 25 basis points to support systemic liquidity. However, chairman of the Prime Minister's Economic Advisory Council C. Rangarajan yesterday said he expected the RBI to cut interest rates at the third quarter policy review in January if inflation continues to soften.
India's headline inflation rate based on the Wholesale Price Index fell to a 10-month low of 7.24% in November against 7.45% in October. Finance Minister P. Chidambaram also said in the Lok Sabha yesterday that he expects inflation to trend downwards in the next 2-3 months. The ongoing winter session of Parliament will also be watched by the market for cues. Tata Motors and Mahindra & Mahindra look positive going ahead. Tata Motors on Wednesday announced that retail sales numbers for Jaguar Land Rover in November had risen 14% on-year to 29,893 units. Bajaj Auto and Hero MotoCorp stocks look weak going forward mainly because there was a slowdown in two-wheeler sales.
