Mumbai: Besides June-quarter corporate earnings, the Reserve Bank of India’s (RBI) monetary policy review will drive the stock markets this week. Globally, the US Federal Reserve meeting to decide interest rate will also be watched out by investors worldwide. The Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday, but it is not expected to tinker rate change this time. The next interest-rate hike is not expected until September, and Fed chair Jerome Powell is unlikely to give much in the way of new guidance about policy.
Back home, according to Mint, the RBI monetary policy committee may raise policy rates by 25 basis points on Wednesday but is expected to maintain its neutral policy stance given the volatility in crude oil and food prices, economists say. Of the 15 economists surveyed by Mint, 12 expect RBI to raise its repo rate, the rate at which it lends to commercial banks, to 6.5%. Only three economists expect RBI to keep rates unchanged at 6.25%.
Vinod Nair, head of research at Geojit Financial Services Ltd, said that as expected, Q1 earnings season has started on a positive note. “On global front, trade tensions seems to be ease and we are seeing some positive momentum in domestic markets. In the near term the momentum will also depend on the outcome of RBI meet, were consensus is showing 25bps rate hike. On global front, investors are keenly awaiting US GDP data which might put some influence on US Fed policy meet next week," he added.
On the earnings side, Housing Development Finance Corp. Ltd, Tata Motors Ltd, Axis Bank Ltd, Oil and Natural Gas Corp. Ltd, Tech Mahindra Ltd, Vedanta Ltd, Power Grid InterGlobe Aviation Ltd, Avenue Supermarts Ltd and Idea Cellular Ltd are among the key companies that will report their June quarter numbers this week.
Auto stocks will be in focus this week after sales data for July is out on 1 August. According to data released by the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales in rose by 37.54% in June, the fastest monthly growth in nearly ten years mainly due to low base of last year when customers postponed purchases expecting price cuts after GST rollout, inflating the growth rate.
In the primary markets, TCNS Clothing Ltd will make stock markets debut on Monday. The issue, open for subscription between 18-20 July, was subscribed 5.27 times with a price band of ₹ 714-716 per share. The women apparel maker, which sells its products under W, Aurelia and Wishful brands aimed to raise nearly ₹ 1,125-crore through the offer.