Markets will watch RBI policy review

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Markets would be closely watching the third quarter review of monetary policy for 2011-12 to be announced on 24th January. The analyst and market participants are saying that the RBI may leave the key rates unchanged.

The expiry of January series derivatives contract this week on Wednesday, 25th January 2012 can make the markets volatile. The stock markets remain closed on Thursday, 26th January 2012, on account of Republic Day holiday.

Reliance Industries Ltd posted a net profit of Rs4440 crore, down 13.6% year-on-year on the back of lower refining and petchem margins. The markets may react negatively to this news though the recent buyback program could cushion the negative move. Watch this stock action on Monday.

The week witnessed strong upward momentum in the markets. The rise has been mainly driven by capital inflows by foreign institutional investors ( FIIs) due to moderating inflation and possibility of monetary easing by the Reserve Bank of India (RBI) after a series of rate hikes by the central bank in the last two years.

The quarterly earnings figures for TCS, Wipro, HCL Technologies, HDFC Bank, Axis Bank, ITC and Reliance Industries were slightly higher than expectations except for RIL.

The BSE Sensex closed the week recording 3.62% gains compared to the previous week. BSE Bankex (5.94%), Bse oil & gas (6.43%), BSE Realty (7.97%), BSE capital goods (5.49%) were amongst the top sectoral gainers while BSE FMCG was the top loser dropping 0.90% for the week.

On the global front, the major indices in the US gained more than 2% for the week on account of improving economic data and strong quarterly numbers from Microsoft, Intel, IBM, Bank of America and Morgan Stanley.

Important quarterly numbers to watch out coming week are Yes Bank, Bank of India, Bank of Baroda, Kotak Bank, L&T, BHEL, Cairn India, GAIL, Maruti Suzuki. Sterlite Industries, Idea, NTPC and Grasim Industries.