RBI Policy Meet, fourth quarter results, other key factors to watch

Indian benchmarks rose 3% in the week ended April 1, helped by cooling crude after positive developments on the Russia-Ukraine conflict and foreign institutional investors (FIIs) turned net buyers. For the week, BSE Sensex added 1,914.49 points (3.33%) to end at 59,276.69 while the Nifty50 rose 517.45 points (3.01%) to end at 17,670.45 levels.

Reduced volatility over the past week. India VIX came off significantly more than 21% to 18.43%. Monday could see a stable start to the week. The 17,800 and 17,905 levels will act as likely resistance points while supports could be seen at the 17,500 and 17,320 levels. The trading range for the week will remain wider than usual.

Ajit Mishra, VP Research, Religare Broking, said: “Markets posted strong gains and stabilized around the week’s high despite mixed global signals. A sharp decline in crude combined with an improvement in foreign flows boosted confidence. However, continued tension around the Russia-Ukraine crisis and global market volatility dampened momentum. Finally, the benchmarks, Nifty and Sensex, gained more than 3% each to close at 17,670.45 and 59,276.69 respectively. The rally was largely fueled by healthy buying across all sectors and all ended in the green except metals. The broader indices also showed a similar trend and gained nearly 3% each.”

In the coming days, the market will mainly focus on the Russian-Ukrainian war, crude price developments and the RBI policy announcement due next week. Market volatility is expected to continue until commodity prices decline and supply constraints are resolved.

Global indices

Vinod Nair, Head of Research at Geojit Financial Services, said: “The market has remained highly volatile due to high commodity prices and the resulting deterioration in future earnings growth. Product prices have been steadily increasing and are expected to increase further in the future, which will affect demand and margin. Rising covid cases in some parts of the world have also added concerns to global equities. Although peace talks between Russia and Ukraine raise hopes for a de-escalation of the war, reports that Ukraine is preparing for new attacks on Russia have boosted sales in the global market. Oil prices fell during the week due to rising covid cases in China and reports that the United States is releasing large oil reserves to limit rising fuel prices. The easing of crude oil prices is positive for the market as it helps companies reduce pressure on margins.”

RBI Political Meeting

Santosh Meena, Head of Research, Swastika Investmart Ltd. said: “This week, RBI credit policy will be a critical factor in the direction of Indian markets as it looks like RBI is behind the curve as most Central banks have already raised interest rates while RBI maintains the status quo. It will be interesting to see how RBI handles the trade-off between inflation and growth where feedback will be crucial.”

Fourth quarter company results

As for earnings, IT stocks appear to be on solid footing. Figures released by Accenture last month exceeded its expectations, which bodes well for the industry as a whole.

Clever prospects

Technically, the Nifty continues its strong bullish momentum after a break of the 17350 level where 17800 is immediate resistance while 18000-18100 is a critical resistance zone. On the downside, the 17500-17450 area will act as an immediate support zone while 17100 is critical support to any sharp pullback.

Clever bank

Finally, Banknifty manages to clear the critical resistance zone of 36700-37000 and it shows strong momentum where 38000 looks like an immediate target but 37400 is an intermediate hurdle. On the downside, the 36700 level should now act as support while 36000 is the next critical support level.

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