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Notwithstanding the strong positive undercurrent next week, Indian equities will be directed by Reserve Bank of India's stance on interest rates. On Tuesday, the Indian central bank will announce its first bi-monthly monetary policy for 2014-15 (Apr-Mar). Governor Raghuram Rajan, who has hiked interest rates three out of the four times since he was appointed head, is this time expected to keep the prime lending rate unchanged. Since Rajan's maiden policy review in September, this is the first instance of a 100% consensus in interest rate expectations. The source of market participants' conviction this time is the sustained sharp fall in inflation, and RBI's promising guidance at the previous review in January. The RBI signalled in its forward guidance in January that it did not anticipate further tightening in the near term if the envisaged disinflationary process pans out. Reserve Bank of India is however, still expected to take a hawkish stance and highlight the lingering upside risks to inflation. On account of their rate sensitive nature, stocks of cyclicals such as banks, real estate and automobiles will also be in focus.
Banks are expected to continue their rally, aided by a positive sentiment based on expectation of status quo, and extension of the deadline for full implementation of Basel III capital norms. In addition to interest rates, stocks of automobiles will also take cues from their monthly sales numbers for March, which will be reported Apr 1 onwards. Overall, sustained inflow of foreign institutional money that lifted stock indices higher for the seventh consecutive session yesterday, is likely to continue next week. National Stock Exchange's 50-share Nifty rose to a record high of over 6700 points intraday. Not only did Nifty and S&P BSE's Sensex ink new lifetime highs, the benchmark indices also ended at record closing levels, led by gains in cement and bank stocks.
Nifty ended at 6695.90, up 54.15 points or 0.8% from close Thursday. Intraday, it moved between 6643.80 and its lifetime high of 6702.60. Sensex ended at 22339.97, up 125.60 points or 0.6%. Intraday, it traded between a low of 22185.11 and a lifetime high of 22363.97 points. MCX Stock Exchange's SX40 ended at 13285.34, up 78.84 points or 0.6%. Intraday, it touched a high of 13285.34 and a low of 13089.69.
Notwithstanding the strong positive undercurrent next week, Indian equities will be directed by Reserve Bank of India's stance on interest rates. On Tuesday, the Indian central bank will announce its first bi-monthly monetary policy for 2014-15 (Apr-Mar). Governor Raghuram Rajan, who has hiked interest rates three out of the four times since he was appointed head, is this time expected to keep the prime lending rate unchanged. Since Rajan's maiden policy review in September, this is the first instance of a 100% consensus in interest rate expectations. The source of market participants' conviction this time is the sustained sharp fall in inflation, and RBI's promising guidance at the previous review in January. The RBI signalled in its forward guidance in January that it did not anticipate further tightening in the near term if the envisaged disinflationary process pans out. Reserve Bank of India is however, still expected to take a hawkish stance and highlight the lingering upside risks to inflation. On account of their rate sensitive nature, stocks of cyclicals such as banks, real estate and automobiles will also be in focus.
Banks are expected to continue their rally, aided by a positive sentiment based on expectation of status quo, and extension of the deadline for full implementation of Basel III capital norms. In addition to interest rates, stocks of automobiles will also take cues from their monthly sales numbers for March, which will be reported Apr 1 onwards. Overall, sustained inflow of foreign institutional money that lifted stock indices higher for the seventh consecutive session yesterday, is likely to continue next week. National Stock Exchange's 50-share Nifty rose to a record high of over 6700 points intraday. Not only did Nifty and S&P BSE's Sensex ink new lifetime highs, the benchmark indices also ended at record closing levels, led by gains in cement and bank stocks.
Nifty ended at 6695.90, up 54.15 points or 0.8% from close Thursday. Intraday, it moved between 6643.80 and its lifetime high of 6702.60. Sensex ended at 22339.97, up 125.60 points or 0.6%. Intraday, it traded between a low of 22185.11 and a lifetime high of 22363.97 points. MCX Stock Exchange's SX40 ended at 13285.34, up 78.84 points or 0.6%. Intraday, it touched a high of 13285.34 and a low of 13089.69.
