Market Outlook

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Market this week

The energy poured by positive interim budget and dovish RBI monetary policy stimulated the market to cross the psychological resistance level of 11,000 for first time in the last three months. However, towards weekend profit booking emerged in rate sensitive stocks and global market turned volatile due to renewed worries over global trade.

As expected the government has put forward many populist measures in the interim budget. Assured income for small farmers and tax rebate for individuals will help to increase disposable income among rural and urban population. Similarly, RBIs monetary policy was in line with expectation with a change in stance to neutral but rate cut was a surprise. Benign inflation outlook and possibility of further ease in key rates will help to revive credit growth which is positive for rate sensitive stocks.

Week ahead

A fall in interest rates and improving outlook for consumption oriented sectors after interim budget will provide support to the market. On the global front, pessimism over growth and trade disputes may lead to volatility. Next week government will unveil CPI inflation and IIP date which will be keenly watched by the investors.

Posted: February 8, 2019

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