nifty target: RBI policy meet, crude oil price among factors that may steer Nifty this week

Now, with the beginning of the new fiscal year, the market will be closely eyeing RBI’s monetary policy review outcome scheduled on April 8. Analysts are expecting status quo. However, the central bank’s commentary on inflation and growth would be critical amid global tightening.

On the macro front, participants will be eyeing manufacturing and services PMI data on April 4 and April 6, respectively. Amid all, global cues such as updates on the Russia-Ukraine war, movement of crude oil would also remain in focus.

“Markets are moving largely in sync with their global counterparts and positive developments on the Russia-Ukraine front could further fuel the rebound. Besides, we expect stock-specific moves on earnings expectations,” said Ajit Mishra, VP Research, Religare Broking.

Following factors will be key in guiding market this week:


RBI policy meeting
Members of the monetary policy committee (MPC) of the Reserve Bank of India will perhaps have the toughest job in the country when they meet from April 6 – 8 to determine the future course of policy rates. Rising inflation is creating pressure on the committee to tighten money supply but that may stop the recovery of the economy. Whatever its decision will be on Friday, the market will surely have a reaction.

Crude oil prices
Crude oil prices have come down in the last couple of weeks but they still maintain above $100 per barrel. The continuously high price is the biggest threat to the economy and margins of companies that use it as a raw material for their product and services. Market will keep an eye on how the prices pan out further during the week. Any further rise in prices will be negative.

Q4 earnings
A select few companies will announce their March quarter numbers during the week but most of them are smaller ones. Meanwhile, traders will start positioning themselves for the earnings season that will pick pace when TCS declares its numbers on April 11.

PMI data
The purchasing managers index, a key measure of demand at factory level, will also be tracked by the market as that will give a signal on overall demand trends in the country, especially when many companies have taken price hikes.

Tech outlook
The market posted a couple of gap-up candles and closed in the green for the last week despite rather weak global markets. Post the narrow range-bound trading last week, Nifty seemed to have found a cushion around 17,000 levels.

“With the benchmark successfully breaking above 17,500, the short-term trend continues to be bullish. Thus, we suggest traders maintain a bullish bias targeting a retest of the immediate resistance zone around 17,800 levels. Declines on the downside are likely to remain capped around 17,000 levels,” said Yesha Shah, Head of Equity Research, Samco Securities.