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Markets to focus on RBI monetary policy, auto stocks, IPOs this week

LiveMint logoLiveMint 02-10-2017 Nasrin Sultana

Indian markets are expected to consolidate further in a truncated trading week marked by the Reserve Bank of India’s (RBI) monetary policy review.

Indian markets are shut on Monday for the birth anniversary of Mahatma Gandhi. The central bank’s monetary policy announcement is due on Wednesday as the markets gear up for the earnings season.

Mustafa Nadeem, chief executive officer, Epic Research, said, “With quarterly results coming, much action will be seen in market in select stocks. Positive dollar may provide some relief to IT sector and select pharma stocks as well.”

According to Jayant Manglik, president, retail distribution, Religare Securities Ltd, the markets are currently dealing with several issues and further correction is inevitable. “However, the pace of decline could be gradual from hereon but that would be more painful for the traders,” he said.

Most economists say the central bank will keep interest rates unchanged. “We expect the RBI to keep rates on hold at 6% and maintain its neutral policy stance. We stay medium-term bullish on India rates and forex, as we expect macro fundamentals of positive real rates and balance of payments to remain supportive,” said Morgan Stanley in a note on 28 September.

Also Read: RBI seen keeping repo rates on hold citing risks to inflation

Auto stocks will be in focus after September sales data. According to a Mint report, launches and festive demand lifted car sales in September. Sales of Maruti Suzuki India Ltd rose 9.6% to 150,521 units in September from a year ago. Tata Motors’s domestic sales rose 25% to 53,965 units in the month.

Reliance Communications Ltd’s decision to call off its planned merger with Aircel Ltd will have an impact on its stock when the markets open for trading on Tuesday. Reliance Communications called off the merger, citing “legal and regulatory” delays on Sunday.

“Merger of mobile business of RCom and Aircel lapses with mutual consent,” the Anil Ambani-led firm said in a statement. Last year, both the telecom companies had signed binding agreements for the merger of their mobile businesses.

Also Read: RCom-Aircel merger collapses, doubts on debt repayment rise

In the primary markets, SBI Life Insurance Co. Ltd will make its stock market debut on Tuesday. The company’s Rs8,400 crore initial public offering (IPO) was subscribed 3.57 times. The IPO, which closed for subscription on 22 September, was priced at Rs685-700 per share.

The IPO of Godrej Agrovet Ltd will open on Wednesday in a price band of Rs450-460 per share. The share sale, which will close on 6 October, comprises a fresh issue of Rs291.5 crore and is aiming to raise around Rs 1,160 crore.

Non-banking financial company (NBFC) MAS Financial Services Ltd on Thursday said it will launch its Rs460 crore initial public offering (IPO) on 6 October.

Gujarat-based MAS Financial Services Ltd will open its IPO for subscription on Wednesday in a price band of Rs456-459. At the upper end of this price band, the NBFC will raise Rs2,275 crore.

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