Week Ahead: RBI Policy, Q3 Results, macro data, global cues among key market

Investors will eye several stock market triggers in the first week of the month including the ongoing October-December quarter results for fiscal 2023-24 (Q3FY24), the upcoming Monetary Policy Committee (MPC) meeting by the Reserve Bank of India (RBI), foreign capital inflow, along with other domestic and global cues.

Domestic equity benchmarks BSE Sensex and Nifty 50 logged their best week in 2024 so far, as the government’s fiscal prudence in Interim Budget 2024 boosted sentiments. The benchmark Nifty 50 index hit an all-time high for the fifth time this year on Friday, driven by gains in heavyweights such as Reliance Industries and information technology (IT) stocks.

Also Read: Nifty February series outlook: 4 stocks where investors can park their money; do you own?

Markets rebounded after spending two weeks in a corrective phase and gained around two per cent, led by favorable cues. The tone was positive for most of the week citing favorable global cues and buying in select heavyweights however underperformance of banking majors continues to weigh on the sentiment.

The frontline indices hit new highs led by large-cap stocks like Reliance Industries, which logged its best week since June 2022. On the weekly basis, the BSE benchmark jumped 1,384.96 points or 1.95 per cent, and the Nifty climbed 501.2 points or 2.34 per cent.

The BSE benchmark declined 106.81 points or 0.15 per cent to settle at 71,645.30 on Thursday when the finance minister presented Interim Budget 2024 in the Parliament. The Nifty 50 dipped 28.25 points or 0.13 per cent to 21,697.45 on February 1. PSU bank surged over two per cent on account of the 10-year G-Sec yield falling to an eight-month low at 7.04 per cent after the finance minister announced a lower borrowing plan.

‘’With US Fed and Interim Budget now behind, all eyes will be on RBI’s policy meeting next week. We expect the central bank to maintain its status quo. Overall we expect the market to remain in positive territory as sentiments remain high amid commendable delivery on budget,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Also Read: Bulls tighten grip over OMCs after ₹15,000 crore capex infusion; IOC, BPCL, HPCL hit 6-9% upper circuit

Going forward, a busy week awaits the primary market as some new initial public offerings (IPO) and listings are slated across the mainboard and small-and-medium enterprises (SME) segments. The upcoming week will be crucial from the domestic and technical point of view as investors will closely eye the corporate results along with the central bank’s policy and global cues.

Overall, analysts expect volatility to remain high due to the prevailing earnings season and the RBI’s policy verdict, but expect that Nifty 50 can mark the next leg of the up move towards 22,500 if it sustains above 22,150 upon stability in the banking index. Experts also noted that stock-specific approach may continue despite market consolidation.

Here are the key triggers for stock markets in the coming week:

RBI MPC Meeting:

Amid expectations that the central bank will keep the benchmark interest rates unchanged, the rate-setting monetary policy panel will begin deliberations in the coming week. Headed by RBI Governor Shaktikanta Das, the six-member MPC will meet for three days – from February 6 to February 8, and the decision will be announced on February 8 at 10 am by the RBI Governor.