RBI's interest rate decision, global trends to drive markets this week: Analysts

The Reserve Bank of India (RBI)’s interest rate decision, domestic macro-economic data, global trends and a few other factors will dictate terms in the equity markets this week, analysts said.

According to the analysts, trading activity of Foreign Portfolio Investors (FPIs) will also influence markets. The RBI’s monetary policy committee meeting to be held on Tuesday (June 6) and the progress of the monsoon will be other factors which will be watched closely.

Pravesh Gour, senior technical analyst, Swastika Investmart Ltd said, “The Indian market will be closely monitoring the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting scheduled for June 6, 2023. Aside from that, market participants will be keeping an eye on the progress of monsoon.”

Shrikant Chouhan, head of equities research (retail), Kotak Securities Ltd, too concurred. He said that domestic market participants will keep an eye on the upcoming RBI policy meet and monsoon progress.

Also read: India’s economy likely to grow in 6.5-6.7% range in FY24: CII president

Rupee against the dollar and crude oil prices

Moreover, Gour said that the movement of the rupee against the dollar and crude oil prices will remain in focus. “These factors will be closely monitored, as they have the potential to influence market sentiment. Additionally, macroeconomic indicators will play a significant role in shaping the market mood in the near-term,” Gour said.

Domestic investors would track the Purchasing Managers Index (PMI) data for the services sector, scheduled to be announced on Monday (June 5).

Last week, the BSE benchmark gained 45.42 points or 0.07 per cent, and the Nifty climbed 34.75 points or 0.18 per cent.

“This week is going to be an eventful one as we have the MPC’s monetary policy meeting outcome scheduled on June 8. Before that, on the macro-economic front, S&P Global services PMI on June 5 will also be on participant’s radar for cues,” Ajit Mishra, SVP – Technical Research, Religare Broking Ltd, said.

The 30-share BSE Sensex climbed 118.57 points or 0.19 per cent to settle at 62,547.11 on Friday. The Nifty advanced 46.35 points or 0.25 per cent to finish at 18,534.10.

Also read: PMI for May stands at 58.7, another indicator of manufacturing revival

PMI and US payroll data

“As we enter a new month, investors are anticipating the release of data points such as PMI and US payroll data, in addition to the outcome of the central bank’s monetary policy meeting,” said Vinod Nair, head of research at Geojit Financial Services.

Contrary to the global trend, domestic indicators favour bullish sentiment, Nair said.

“The release of domestic GDP data, surpassing expectations, and robust Q4 earnings bolstered the growth prospects of the domestic market. Additionally, auto sales for the month of May displayed a sequential recovery, boosting sentiment across the sector,” he added.

(With inputs from agencies)