Indian Markets Outlook for the week – 16.03.2015 to 20.03.2015
( www.rupeedesk.in )
For the week ahead, share indices will take cues from
the Budget session of the Parliament, the US Federal Reserve's stance on
interest rate hike, and the Wholesale Price Index-based inflation data for
February. The first half of Budget session of the Parliament will continue till
Mar 20, and will be keenly watched as approval for a hike in the foreign direct
investment limit for the insurance sector has raised hopes of more reforms
seeing the light of the day.
The US Federal Open Market Committee, meanwhile, is
scheduled to commence its two-day
meeting on Tuesday. The US central bank's view is of
importance as it is likely to impact flows from foreign institutional
investors. WPI inflation data for February will be released on Monday.
Apart from these, the coal block auction and the telecom
spectrum auction will keep shares of power, metal, steel and telecom shares in
focus.
Despite a number of events on the watch list, the
sentiment in the market is subdued after
economic data released post market hours Thursday dashed
hopes of another rate cut by the Reserve Bank of India. Data showed that in
January, Index of Industrial Production moderated to 2.6%, while headline
inflation rate for February based on CPI rose to 5.4%, marginally higher than
the estimated 5.3%. This disappointment was reflected in the market movement
yesterday, with indices shedding 1.5% each to end at an over one-month low.
Deutsche Bank said if the Consumer Price Index based inflation
data moves in line with their
expectations in the next six months, then the 6% Jan
2016 target for inflation will not be
difficult to achieve. In such a scenario, the average
CPI inflation for FY16 should be about
5.5%, which will allow RBI to cut rates by another
50bps. The bank also believes that the RBI will prefer cutting rates in the
first half of the year, rather than the second half, "given that the
second half of the year could see financial market volatility increase due to
potential Fed policy normalisation".
Stock-specific action is likely to see Blue Star in
action after the said it will sell its electronics
and industrial operations to its arm for 1.1 bln rupees.
( www.rupeedesk.in )
