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The Reserve Bank of India's second quarter review of monetary policy 2013-14 (Apr-Mar) will set the tone for the equity market next week. The market widely expects the central bank to hike repo rate by 25 basis points and see the Marginal Standing Facility Rate being lowered by 25-50 bps.The recent stability in currency markets as the probability of the US Federal Reserve tapering its quantitative easing in the near term has reduced - indicates that RBI will likely remove the earlier monetary tightening measures. Most market participants said a 25 bps hike in repo rate is largely priced in, but anything more than that would have a negative impact on the market. In the event of status quo being maintained, the market is likely to rally. Overall trade next week is likely to be volatile as the Nifty October derivatives contract expires on Thursday and as a number of companies are due to report Jul-Sep earnings next week. In the backdrop of these major events. The major events lined up on the domestic front, the monetary policy meeting of the US Federal Reserve is unlikely to steer the market. Among Nifty constituents, Bank of Baroda, Bharti Airtel, Dr Reddy's Laboratories, DLF, Jindal Steel & Power, Lupin, Maruti Suzuki, NTPC, Ranbaxy Laboratories and Sesa Sterlite will detail their Jul-Sep result next week. Bank shares are likely to be under pressure ahead of the RBI policy,while defensives like information technology and pharmaceutical companies' shares are likely to extend gains. Hindustan Unilever shares will take cues from the company's second quarter earnings due on Saturday. The index heavyweight is seen posting a modest year-on-year rise in net profit for Jul-Sep at 8.6 bln rupees.
The Reserve Bank of India's second quarter review of monetary policy 2013-14 (Apr-Mar) will set the tone for the equity market next week. The market widely expects the central bank to hike repo rate by 25 basis points and see the Marginal Standing Facility Rate being lowered by 25-50 bps.The recent stability in currency markets as the probability of the US Federal Reserve tapering its quantitative easing in the near term has reduced - indicates that RBI will likely remove the earlier monetary tightening measures. Most market participants said a 25 bps hike in repo rate is largely priced in, but anything more than that would have a negative impact on the market. In the event of status quo being maintained, the market is likely to rally. Overall trade next week is likely to be volatile as the Nifty October derivatives contract expires on Thursday and as a number of companies are due to report Jul-Sep earnings next week. In the backdrop of these major events. The major events lined up on the domestic front, the monetary policy meeting of the US Federal Reserve is unlikely to steer the market. Among Nifty constituents, Bank of Baroda, Bharti Airtel, Dr Reddy's Laboratories, DLF, Jindal Steel & Power, Lupin, Maruti Suzuki, NTPC, Ranbaxy Laboratories and Sesa Sterlite will detail their Jul-Sep result next week. Bank shares are likely to be under pressure ahead of the RBI policy,while defensives like information technology and pharmaceutical companies' shares are likely to extend gains. Hindustan Unilever shares will take cues from the company's second quarter earnings due on Saturday. The index heavyweight is seen posting a modest year-on-year rise in net profit for Jul-Sep at 8.6 bln rupees.
