Patel is slated to announce his second bi-monthly monetary policy on November 7th.
While the political and academic arena has been abuzz with opinions in the aftermath of the government's demonetization move, the Reserve Bank of India (RBI) including its chair has been largely mum save from the regular mandates it has issued about the norms under the decommissioning move.
In the coming week, all eyes will be on RBI Governor Urjit Patel, who is slated to chair his second media interaction after the announcement of the monetary policy. Patel is finally expected to share his and the central bank's stance on the move. When it comes to the monetary policy stance, experts are divided whether the central bank will maintain status quo or cut rates on Wednesday.
"While the market has factored in a 25 basis point rate cut. But any pause by RBI in expected rate cut, reacting to a (US Federal Reserve) Fed decision, could lead to further downside in sentiments," Vijay Singhania, Founder-Director, Trade Smart Online, said.
"It will be interesting to watch RBI's monetary policy stance in a scenario of government's recent historic move of demonetization of higher denomination notes and amid easing consumer inflation. In its last week in October 2016, RBI had cut policy rates by 25 basis points."
While the BSE closed down 329.26 points or 1.24% lower at 26,230.66 on Friday evening, the 50-share Nifty was down 1.30% or 106.10 points lower at 8,086.80.
Apart from the RBI monetary policy, the markets will track the developments of the Italian referendum and news from the US Federal Reserve hinting towards a rate hike amid positive economic data. "Markets sentiments in the coming week are expected to remain volatile as the focus will shift to key global events like US Federal Reserve policy meet and the Italian referendum," Singhania said.
On Monday, markets will also tract Asian stocks which will react to the US non-farm payroll data for November 2016. Markets will look at Friday’s non-farm payrolls data in the US, the last jobs report before the Fed meets this month. Focus also switches to Italy’s vote outcome on constitutional reform at the weekend, he added.
On the home turf, developments in the Winter Session of the Parliament will also weigh on the markets.
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