RBI policy, global cues to steer markets this week

New Delhi: RBI policy, global trade scenario and macroeconomic data are likely to dominate market sentiment this week, say experts.

“Going ahead, the focus of the market globally will be on bond yields, oil prices and trade war tensions. Domestically, RBI policy and its outcome on rates is eyed closely due to impact of higher fuel prices, expected increase in MSP on inflation and improved growth prospects for economy.

“IMD has projected a third successive normal monsoon this year so timing and distribution of rainfall is also important parameter to look into going forward,” said Teena Virmani, Vice President Research, Kotak Securities Ltd.

Global investor sentiment was dented this week after US President Donald Trump imposed tariffs on steel and aluminum imports from key allies the EU, Canada and Mexico, fanning fears of retaliatory responses.

Back home, RBI’s second bi-monthly monetary policy meeting of 2018-19 will be held from June 4-6. The Reserve Bank has refrained from revising the repo rate since August 2017 citing inflationary concerns. PMI data for the services sector would also influence trading sentiment, market experts said.

“Rate hike fears from RBIs monetary policy this week are expected to keep markets under check. There is a likelihood that rates might increase due to inflationary tendencies of high crude oil prices which will translate into higher consumer price index,” said Jimeet Modi, Founder and CEO, SAMCO Securities.

Over the last week, the Sensex climbed 302.39 points, or 0.87 per cent, to end at 35,227.26.