The Union Budget 2019 dominated the business sentiment last week, which ended higher as the stock markets reacting positively to the tax sops and cash transfers announced by the interim finance minister for the small farmers. The decision of the Federal Reserve to keep the interest rates unchanged, better than expected US jobs and factory data and positive comments on the US-China trade talks also kept the sentiment buoyant.
For the week, both indices closed with gains of over a percent. Among sectors, IT was the big gainer, while metals lost the most.
The factors that will move the markets this week are:
- Reserve Bank of India: RBI’s Monetary Policy Committee (MPC) meeting assumes significance after the interim budget introduced sops that will lead to uptake of consumption demand. Investors will wait to see whether the central bank cuts repo rates and CRR to ease pressure on banks. This will also be the first policy meeting of new Governor Shaktikanta Das after he took over from Urjit Patel. MPC meeting is scheduled from February 5 to 7 for the sixth and final bi-monthly monetary policy review for 2018-19. In its last review, the MPC had kept the key lending rates unchanged. Finance Minister Piyush Goyal is scheduled to address the customary post budget meeting of the central board of the bank on February 9 and highlight the key points of the budget.
- Domestic Earnings: Companies will announce their December quarter results this week – Tech Mahindra, GAIL, HPCL, ACC, BHEL, Punjab National Bank, Adani Ports, Tata Motors, Aurobindo Pharma, Britannia, Adani Enterprises, Coffee Day, Cadila Healthcare, Arvind and Grasim, Mahindra & Mahindra.
- The rupee’s movement versus the US dollar, foreign funds’ flow direction and global crude oil price fluctuations will also influence businesses. The rupee on Friday weakened by 17 paise to close at 71.25 against the US dollar