Weekly outlook: RBI policy review, IIP data to dictate stock markets

The Reserve Bank of India's (RBI) monetary policy review, IIP data and foreign fund inflows will set the course in the coming week for the stock markets, which are likely to witness heightened volatility, say experts.

Upcoming corporate results season and the RBI policy review on April 7 would be the next key trigger for the markets, they added.

"We expect the RBI to maintain status quo in the April 7 monetary policy as they might want to wait for more confirming data on inflation before taking any action," said Hitesh Agrawal, Head Research of Reliance Securities.

The week starting April 6 is laced with events like RBI monetary policy review in the early part of the week and IIP data, which is scheduled to be released on April 10.

The next major trigger for the stock market is Q4 results. The result season kick-starts with IT major Tata Consultancy Services (TCS), which will announce its FY15 results on April 16.

Besides, movement of rupee against dollar and crude oil price would also influence trading sentiments in the domestic equity market.

"After (a) long weekend, we have two major events lined up this week. First, we have RBI's first bi-monthly monetary policy meet and then industrial production data for February... Considering the above events and overall market scenario, volatility will remain high especially in rate sensitive sectors like banking, auto and realty," said Jayant Manglik, President-retail distribution, Religare Securities.

Participants should keep a close watch on global cues as they may influence the early trade on Monday, Manglik added.

"After (a) phenomenal run in FY15, participants should prepare for an exciting and definitely challenging new financial year. The foundation for economic recovery was laid in the last financial year and aided significant improvement in the macro scenario, but failed to fuel credit off-take and corporate earnings so far... Despite that both domestic and global investors upheld their positive bias anticipating improvement in the coming quarters," Manglik said.

The benchmark Bombay Stock Exchange (BSE) index Sensex rose sharply by 2.91 per cent to conclude at 28,260.14 in a truncated last week.

"After the Budget, US Fed meet and RBI rate cut, markets have been left gasping for fresh triggers," said Paras Bothra, VP, Equity Research Ashika Stock Broking.

Markets would on Monday react to the US jobs data that was announced on Friday. US employers cut back hiring in March, in a fresh sign of a slowdown in their economy.