Stock Market Next Week: RBI Policy Meet, Q4 Results, Other Key Factors to Watch Out For

Indian benchmark indices rallied three per cent in the week ended April 1 led by cooling crude after positive developments on Russia-Ukraine conflict and foreign institutional investors (FIIs) turning net buyers. For the week, BSE Sensex added 1,914.49 points (3.33 per cent) to end at 59,276.69 while the Nifty50 rose 517.45 points (3.01 per cent) to end at 17,670.45 levels.

Volatility reduced over the past week. India VIX came off significantly by over 21 per cent to 18.43 per cent. Monday may see a stable start to the week. The levels of 17,800 and 17,905 will act as probable resistance points while the supports may come in at 17,500 and 17,320 levels. The trading range for the week will stay wider than usual.

Ajit Mishra, VP Research, Religare Broking, said: “Markets posted strong gains and settled around the week’s high despite mixed global cues. A sharp decline in the crude combined with an improvement in foreign flows boosted sentiment. However, the lingering tension over the Russia-Ukraine crisis and volatile global markets capped the momentum in check. Finally, the benchmark indices, Nifty and Sensex, gained over 3 per cent each to close at 17,670.45 and 59,276.69 respectively. The rally was driven largely by healthy buying across sectors and all ended in green barring metals. The broader indices also showed a similar trend and gained nearly 3 per cent each.”

In the coming days, the major focus of the market will be on Russia- Ukraine war, movement in crude prices and RBI’s policy announcement due next week. The volatility is expected to continue in the market until commodity prices subside and supply constraints get resolved.

Global Cues

Vinod Nair, Head of Research at Geojit Financial Services, said: “The market remained highly volatile due to elevated commodity prices and the resultant downgrade of future earnings growth. Prices of products have been increasing constantly and are expected to increase further in the future affecting demand and margin. Rising covid cases in parts of the world also added worries to global equities. Though peace talks between Russia and Ukraine gave hopes of de-escalation of the war, the reports of Ukraine preparing for new attacks on Russia intensified selling in the global market. Oil prices plunged during the week due to rising covid cases in China and reports that the US is releasing substantial petroleum reserves in order to curtail fuel price hikes. Easing crude oil prices is positive for the market as it helps corporates to reduce their margin pressure.”

RBI Policy Meet

Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “This week, the RBI credit policy will be a critical factor in the direction of Indian markets because it seems that RBI is behind the curve as most of the central banks have already hiked interest rates while RBI is maintaining the status quo. It will be interesting to see how RBI will manage inflation and growth tradeoff where commentary will be crucial.”

Q4 Company Results

As far as earnings are concerned, IT stocks seem to be on a strong footing. Numbers released by Accenture last month surpassed its expectations, which bodes well for the industry as a whole.

Nifty Outlook

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

Bank Nifty

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

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