NEW DELHI: Domestic stock indices are preparing for the Reserve Bank of India’s (RBI) monetary policy decisions, which are expected to provide fresh direction to the markets in the coming week.
India’s Gross Domestic Product (GDP) growth slowed to 5.4 per cent in Q2 FY25, marking the lowest growth rate in two years.During the past week stock markets, however, showed some recovery. The Sensex 30 and Nifty 50 indices collectively rose by 1 per cent over the week, recording their second straight week of gains despite mixed market signals.
“The upcoming week brings key data releases and events. Participants will first react to the GDP data released post-market on Friday. The primary focus will be on the RBI MPC’s monetary policy review, where policymakers’ interpretation of the GDP data and their stance on the rate trajectory will be crucial,” Ajit Mishra – SVP, Research at Religare Broking Ltd was quoted as saying by news agency ANI.
He also noted that high-frequency indicators, including auto and cement sales, as well as HSBC Manufacturing and Services PMI data, are likely to guide market trends. Foreign inflows are also expected to remain a key factor influencing investor sentiment.
Foreign portfolio investors became net sellers in India for the second consecutive month in November, although the rate of selling eased in the second half of the month.
The RBI’s monetary policy review meeting is scheduled from December 4 to December 6.Stocks have been volatile in recent weeks, with recent bearish trends linked to fund outflows, lower-than-expected Q2 earnings from India Inc., and ongoing high inflation.
The BSE benchmark Sensex closed at 79,746.24 points, up by 702.50 points, while the Nifty ended at 24,131.05 points, gaining 216.90 points on Friday. This was ahead of the GDP data, which later revealed India’s growth at 5.4 per cent, below the RBI’s forecast of 7.0 per cent.
Sensex still remains almost 6,000 points below its all-time high of 85,978 points.