RBI Policy key stock market trigger this week

The Union Budget for fiscal year 2022-23 triggered volatility on the bourses last week.
While bulls took the baton and charged ahead during the initial part of the week, bears dragged the indices lower in the second half amid profit booking and wobbly global markets.
The frontline S&P BSE Sensex and the Nifty50 eventually ended the week with 2.5% higher at 58,645 and 17,516, respectively.

As per technical charts the 50-pack Nifty index may attempt to reclaim the 18,000-mark this week if it manages to conquer the immediate resistance level of 17,800. 17,400 remains a key support level.
As regards Sensex, the 30-pack index may quote between 57,400 and 59,750. The index has support at 57,850 and resistance at 59,300.

One of the key triggers this week will be the Reserve Bank of India’s monetary policy outcome as the MPC will begin its three-day meeting later today.
Analysts expect RBI’s guidance to be dovish when compared to global peers, who have been guiding or announcing rate hikes as inflation become into a concern.
They say, growth concerns amid spread of the Omicron variant and relatively benign inflation out-turns may provide the RBI with enough room to maintain its growth-supportive monetary policies.
 
However, markets will eye the MPC’s commentary as it tries to strike a balance between post-pandemic liquidity and bond yields.
The yields on 10-year govt bonds have already risen to two-year high since the announcement of the Budget. Any decision to reduce liquidity may further push the yields higher, which may affect equities too.

Against this backdrop, money market action along with rate sensitive stocks in the banking and real estate space will be in focus in early part of this week. The RBI will announce its policy outcome on Wednesday, Feb 9.
 
That apart, stock-specific action will remain plentiful as results season enters its last leg.
Policybazaar, TVS Motor, Union Bank of India, Bata India, Escorts, Indraprastha Gas, IRCTC, Berger Paints, Tata Power, M&M and Hero MotoCorp are some of the notable companies set to report their December quarter results this week.
 
Meanwhile, in the primary market, the initial share of Vedant Fashions will close on Tuesday, Feb 8. So far, the issue has been subscribed less than 20 per cent.
Globally, the meltdown in technology stocks on Wall Street will be tracked by market participants, along with oil prices and bond yield movement.

Watch video