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Markets are expected to open on a positive note tracking gains in the Asian shares.
At 8:10am, SGX Nifty traded 100 points higher at 5,972.
The Wholesale Price Index Inflation data schedule later today will be the trigger for our markets in terms of determining the policy stance of the central bank on September 20 mid-quarter review..
The outcome of the US Fed meeting, which is widely expected to taper its $85 billion a month bond-buying programme, wholesale price index inflation data and the RBI's monetary policy outlook will determine market direction this week.
The US Federal Reserve will meet on September 17-18 and global markets, including India, are tracking whether the Federal Open Market Committee would reduce the monthly purchases of treasuries, brokers said.
Over the past week, the BSE benchmark Sensex has added 463 points, or 2.4%, the third week of gains.
"We believe that some tapering off is already priced in and to that extent, if the actual amount of taper matches expectations, it may not be taken negatively," said Dipen Shah, Head, Private Client Group Research, Kotak Securities.
Newly-appointed RBI Governor Raghuram Rajan, a former IMF economist, postponed the central bank's mid-quarter policy review to September 20 from September 18 as he wanted to consider all major developments, including the Fed announcements and their effects on the markets.
While all eyes would be on Rajan's first monetary policy review, the continuing slowdown in both investment and consumption in the Indian economy has recently been aggravated by the RBI's liquidity tightening aimed at stabilising the rupee, which has tanked 18% since April 30.
"Rate cut hopes are minimal due to pressure on the rupee. The appointment of a new Governor has fuelled the rally and boosted sentiment, but much needs to be seen in coming sessions, as to whether the market sustains this uptrend or not," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
Expect volatility and some amount of confusion in the minds of the marketmen regarding the direction of the overall markets in the short term, said Nagji K Rita, Chairman & MD, Inventure Growth and Securities.
