Market to shrug off RBI rate dampener; earnings in focus

The market is unlikely to react to Reserve Bank of India deputy governor HR Khan's comment on interest rates, as investors continue to focus on the government's reforms, according to analysts. Some traders, though, could pare positions in the Bank Nifty Stock Market Tips

Meanwhile, key economic data due this week and earnings of index majors like ONGC, SBI,BHEL, Tata Steel, Hindalco and Sun Pharma could keep traders on edge. 

"I don't think RBI deputy governor's statement on interest rates is a big dampener for markets, as investors are now more focused on the government's legislative Bills, which will be introduced in the winter session of Parliament, starting November 24," said Ajay Bodke, head, investment strategy and advisory, Prabhudas Lilladher Free Share Tips


Analyst said the government's priority in the winter session of Parliament will be to pass the Insurance Laws (Amendment) Bill, which seeks to raise the cap on foreign direct investment in the sector to 49 per cent, and the Land Acquisition and Rehabilitation and Resettlement Bill. For the week ended Friday, the benchmark BSE Sensex rose 2.80 points or 0.01 per cent to close at 27,868, while the NSE Nifty gained 14.80 points or 0.17 per cent to settle at 8,337. However, traders were seen active in the banking space, with fresh long positions being added in key stocks Intraday Trading Tips

"Bank Nifty open interest have jumped 27 per cent over the last one week, which indicates that market participants are expecting some positive move in the sector," said Chandan Taparia, derivative & technical analyst at Anand Rathi Securities. "RBI deputy governor's statement is unlikely to hurt sentiment, while we expect the Nifty to touch 8,500 over the coming days." 



Shares, however, could react to key macroeconomic data due this week. IIP data for September is scheduled for release on Wednesday. The combined consumer price indices for urban and rural India for October will be released on Wednesday, while inflation data based on wholesale price index for October will be out on Friday. "We are increasingly confident about a repo rate cut in February Commodity Trading Tips

While the December policy should turn more dovish and the RBI governor may want to wait for further clarity on inflation peakoff," said Indranil Sen Gupta, India chief economist at BofA-ML. Interest rate-sensitive sectors such as capital goods and banking have been the biggest gainers over last one-month on hopes of a rate cut and economic recovery. 

"Market participants were not betting for interest rate cuts this year, while the undertone continues to remain positive. We expect the Nifty to touch 8,565, with strong support at 8,200 levels," said Alex Mathews, head of research at Geojit BNP ParibasBSE -1.71 per cent Financial Nifty Trading Tips