Volatility to persist, RBI rate action to have impact on market
Monday, 22 March 2010
MUMBAI, Mar 21 (Economic Times): Stocks are likely to remain ranged in the coming days given the F&O expiry and a holiday-shortened week of trade.
The market breadth has been positive since the Union Budget and the FIIs also have been pouring money into the Indian equities on a sustained basis. Standard & Poor's revision of the outlook for India from 'negative' to 'stable'; was a major confidence booster for markets.
Two other rating agencies, Moody's and Fitch, already have a stable rating on India. FII inflows during March 2010 have totalled Rs 141 billion, while the inflow in the calendar year 2010 totalled Rs 147 billion (till 17 March 2010).
The sudden spurt in investment has been the main driver for the recent rally, noted the research desk at Anagram Broking.
However, momentum was clearly lacking to take the indices to new 'highs' as the RBI deputy governor has clearly indicated that the RBI might go for upward revision in key rates before the April 2010 policy review.
In fact a late evening action Friday by the RBI, it has increased both repo and reverse repo rates by 25 basis points to 5 per cent and 3.5 per cent with immediate effect.
"The next week will be a holiday-shortened one with monthly derivatives expiry due Thursday. Thus, volatility may be seen during the intra-day movement. The Nifty is likely to remain under the 5300 mark with support seen at around the 5200 level. Among the global cues US Q4 GDP data is due on the last trading day of the coming week," said ICICI Direct.com
"In the next week, which is a truncated week with just four trading sessions and also an 'Expiry' week in F&O, immediate reaction to RBI action could be negative. Further, markets will be looking at Global cues for direction and FIIs activity could be the trend decider.
The market breadth has been positive since the Union Budget and the FIIs also have been pouring money into the Indian equities on a sustained basis. Standard & Poor's revision of the outlook for India from 'negative' to 'stable'; was a major confidence booster for markets.
Two other rating agencies, Moody's and Fitch, already have a stable rating on India. FII inflows during March 2010 have totalled Rs 141 billion, while the inflow in the calendar year 2010 totalled Rs 147 billion (till 17 March 2010).
The sudden spurt in investment has been the main driver for the recent rally, noted the research desk at Anagram Broking.
However, momentum was clearly lacking to take the indices to new 'highs' as the RBI deputy governor has clearly indicated that the RBI might go for upward revision in key rates before the April 2010 policy review.
In fact a late evening action Friday by the RBI, it has increased both repo and reverse repo rates by 25 basis points to 5 per cent and 3.5 per cent with immediate effect.
"The next week will be a holiday-shortened one with monthly derivatives expiry due Thursday. Thus, volatility may be seen during the intra-day movement. The Nifty is likely to remain under the 5300 mark with support seen at around the 5200 level. Among the global cues US Q4 GDP data is due on the last trading day of the coming week," said ICICI Direct.com
"In the next week, which is a truncated week with just four trading sessions and also an 'Expiry' week in F&O, immediate reaction to RBI action could be negative. Further, markets will be looking at Global cues for direction and FIIs activity could be the trend decider.