Markets likely to be volatile as investors await RBI, Fed moves

With mixed signals on the economic front, stock market is likely to see volatility this week as investors track RBI’s policy as well as the US government’s monetary easing steps, feel experts.

Besides, foreign investors are expected to closely watch government initiatives amid a depreciating rupee.

Industry is anticipating the central bank to slash rates to boost sagging growth even as there are concerns that easing money supply would further weaken the rupee.

According to analysts, stocks are expected to see volatile trading as the next moves of RBI and the US Federal Reserve would be crucial in determining overall investor sentiment.

 Snapping a three-day losing streak, the benchmark S&P BSE Sensex had jumped nearly 351 points to close at 19,177.93 points on Friday as drop in WPI inflation rekindled hopes of a rate cut.

Meanwhile, the US Federal Reserve meeting this week would be closely tracked for cues on the future of quantitative easing policy.

Investors are also anticipating more reform initiatives with Finance Minister P Chidambaram hinting at more such steps to boost spur growth that has hit 10-year lows.

Apprehensions about American monetary easing policy is cited as a reason for the sharp fall in rupee, which closed at 57.51 against the dollar on Friday.