Action packed week ahead - Anand Rathi

The key domestic benchmarks closed in the positive terrain as hopes rose that the Reserve Bank of India may cut interest rates for the first time in nine months next week in a bid to fastrack growth in Asia's third biggest economy, bolstering the appeal of risky assets. With the Indian government sticking to its reforms pledge to stem its fiscal deficit, the RBI may be confident enough to step up monetary easing.

The Sensex ended up with 0.32% of gains and the Nifty closed higher by 0.17%.

On the Global front, The United Nations Conference on Trade & Development ( Unctad) on Thursday stated that inflows of Foreign Direct Investment ( FDI) into India fell 13.5 per cent in 2012. On the Domestic front, The Commerce and Industry Ministry is pushing for lowering of minimum alternate tax on Special Economic Zones (SEZs) in the forthcoming Budget as it has led to flight of proposed investments from the zones. Budget is the much awaited event for this year as it is the last budget of the ruling government. It is also trying to convince the Finance Ministry to extend the cutoff date for zones that would come under the proposed Direct Taxes Code beyond April 1, 2012.

Emphasizing that India has seen large number of reforms in recent years, Urban Development Minister Kamal Nath said that even a lull in activities is taken as paralysis since expectations from investors are too high.

The Reserve Bank has also hiked FII investment limits in Government securities and corporate bonds by $5 billion each, taking the total cap in domestic debt to $75 billion, with a view to bridging the current account deficit.

On corporate front result season is in full swing with many biggies declaring their results. Till date 392 companies have declared their results with 16.3% of top line growth and 89.6% in the bottom line. Other income has shown a drastic increase of 188% , EBIDT has increased 39.2% on y-o-y basis.

Next week is expected to be a very action packed week with many events lined up. The much awaited RBI policy on 29th Jan where huge expectations are built up on the rate cut front, though our economist is of the view that we may see a CRR cut but rate cut looks difficult though it cannot be ignored if any external pressure happens to be on RBI. Also result season would be in full swing with many results like ING Vysya bank, RIL Infra, Crompton Greaves, Dabur, EIL, Glenmark, Idea Cellular, Reliance Cap, SJVN, Titan etc. Next week will also see the derivative settlement day as well. These events will keep the markets very volatile and we may see more of stock specific movements happening.

Source : Equity Bulls

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