Indian shares to stay choppy
Monday, 28 July 2008
MUMBAI, July 27 (AFP): Indian shares are likely to remain choppy this week as the markets await a crucial monetary policy meeting by India's central bank.
The markets began the previous week positively, gaining nearly 19 per cent in five days to Wednesday after the government won a parliamentary confidence vote, which boosted its economic reform agenda.
The win averted snap elections and allows the government to push on with implementing a nuclear energy deal with the United States.
And despite falling 4.70 per cent from Wednesday to Friday the markets were up for a third straight week as concerns linked to crude oil and inflation eased marginally.
The Reserve Bank of India will gather on July 29 for its monetary policy meeting.
"The markets are likely to consolidate after a sharp rally of the past few days, before resuming its intermediate uptrend," said PK Agarwal, president (research) with Bonanza Portfolio.
For the week to July 25, the benchmark 30-share Sensex index rose 4.69 per cent or 639.54 points to 14,274.94.
On Thursday, it was reported annual inflation in Asia's third-largest economy fell 11.89 per cent for the week ended July 12, against 11.91 per cent for the previous week.
Dealers expect markets to be choppy in the coming weeks on expectations that the RBI will increase rates to curb rising inflation.
Last month, the RBI raised its repo rate-the rate at which commercial banks borrow funds from the central bank-to 8.5 per cent from 8.0 per cent with immediate effect.
The markets began the previous week positively, gaining nearly 19 per cent in five days to Wednesday after the government won a parliamentary confidence vote, which boosted its economic reform agenda.
The win averted snap elections and allows the government to push on with implementing a nuclear energy deal with the United States.
And despite falling 4.70 per cent from Wednesday to Friday the markets were up for a third straight week as concerns linked to crude oil and inflation eased marginally.
The Reserve Bank of India will gather on July 29 for its monetary policy meeting.
"The markets are likely to consolidate after a sharp rally of the past few days, before resuming its intermediate uptrend," said PK Agarwal, president (research) with Bonanza Portfolio.
For the week to July 25, the benchmark 30-share Sensex index rose 4.69 per cent or 639.54 points to 14,274.94.
On Thursday, it was reported annual inflation in Asia's third-largest economy fell 11.89 per cent for the week ended July 12, against 11.91 per cent for the previous week.
Dealers expect markets to be choppy in the coming weeks on expectations that the RBI will increase rates to curb rising inflation.
Last month, the RBI raised its repo rate-the rate at which commercial banks borrow funds from the central bank-to 8.5 per cent from 8.0 per cent with immediate effect.