Finance News : Money policy

NEW DELHI: The domestic stock market ended the last day of financial year 2017-18 on a negative note. However, the week belonged to the bulls.

The S&P BSE Sensex added 372 points, or 1.14 per cent, during the week, while NSE’s Nifty50 gained 115 points, or 1.15 per cent.

Gautam Duggad, Head of Research, Motilal Oswal Institutional Equities, said FY19 will be dominated by news flow around politics with several states going for elections, which will culminate in the general elections 2019 scheduled for April-May 2019. A busy political calendar aside, earnings growth should revive in FY19 after three years of flattish earnings on account of various disruptions (GST, demonetisation, RERA, NCLT).

“A cleanup of banking system and resolution of few NCLT cases will inspire confidence in the earnings recovery story. Consumption recovery is firmly in place in our view and we are seeing some very early signs of private capex revival,” said Duggad.

That said, here’s a look at the key events/developments that may steer the market in the first week of FY19:-
RBI policy meet
The Reserve Bank of India’s (RBI) monetary policy committee (MPC) will meet on April 4-5 for the first bimonthly monetary policy review of 2018-2019, with the decision due on April 5 (Thursday). The central bank is likely to keep the monetary policy steady at the meeting, but shift to a hawkish stance. It will raise interest rates early in 2019, as inflation pressures build, economists said in an analysts’ poll. At its last meeting on February 7, RBI kept the repo rate unchanged at 6 per cent. Consequently, the reverse repo rate remains at 5.75 per cent, and the marginal standing facility (MSF) rate and the bank rate at 6.25 per cent, each.

Macro data
A number of macroeconomic numbers are slated for release next week. The Nikkei India Manufacturing PMI data for March will be released on April 2. India’s manufacturing activity declined to a four-month low in February. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in February from 52.4 in January.

Markit Economics will unveil the result of a monthly survey on the performance of India’s services sector in March 2018 on Wednesday, April 4. The seasonally-adjusted Nikkei India services purchasing managers’ index (PMI) dropped to 47.8 in February from 51.7 in January.

What do tech charts say?
The Nifty50 index on Wednesday came under selling pressure and formed a bearish candle on the daily chart, suggesting weakness in the market. On the weekly chart, the index formed a Harami candle, which indicated that the bulls were not ready to lead, even after a major downtrend. “If the index sustains below 10,141, a fresh push could take it towards 10,050 level. On the upside, a major hurdle is seen at 10,222,” said Chandan Taparia of Motilal Oswal Securities.

Angel Broking expects the Nifty50 to see resistance in the 10,230-10,350 range next week. It sees support for the index at 10,049, followed by 9,951 level.

ICICI Bank crisis
The Central Bureau of Investigation (CBI) has questioned few ICICI Bank officials as part of a preliminary enquiry to find if any quid pro quo was involved in the bank issuing a Rs 3,250 crore loan to the Videocon Group in 2012. Media reports this past week alleged that Videocon Group chairman Venugopal Dhoot invested Rs 64 crore ($9.83 million) in Nu Power Renewables, a firm owned by Deepak Kochhar, the husband of ICICI Bank CEO Chanda Kochharafter Videocon secured a loan from a consortium of banks, including ICICI Bank.

Auto stocks in focus
Auto shares will be in the limelight as the companies will start releasing monthly sales numbers for March 2018 from April 2. Vehicle sales maintained their upward momentum in February, backing up India’s revival story. Automakers reported steady growth with new models such as Maruti Suzuki Swift, Hyundai Verna and Tata Nexon pushing up sales numbers.

Stock-specific action
Many stock-specific actions are likely to play a key role in determining market direction. Ambuja Cements, Aurobindo Pharma and Bosch will be excluded from the benchmark Nifty50 with effect from April 2. They will be replaced by Bajaj Finserv, Grasim Industries and Titan. These replacements will also be applicable to the Nifty50 Equal Weight index, said a PTI report.
This apart, IndianOil plans to invest Rs 1.43 lakh crore ($22 billion) over next five years, as it seeks to raise annual capacity to about 3.2 million barrels per day by 2030. The company currently owns and operates 11 out of the country’s 23 refineries, with a total capacity of 80.7 million tonnes per annum.

Crude prices rising
Oil prices rose on Thursday as the producer cartel Opec and other suppliers look set to continue withholding output for the rest of the year and potentially into 2019. US WTI crude futures were at $64.57 a barrel at 0242 GMT, up 19 cents, or 0.2 per cent, from their previous settlement. Brent crude futures were at $69.72 per barrel, up 19 cents, or 0.3 per cent, Reuters reported. Major US financial markets including commodities were closed on Friday on account of Good Friday.

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