It is an important week for the market, not just because of expiry but because of the slew of policy announcements expected from New Delhi and the Reserve Bank of India (RBI) which could set the tone for market expectations. So expect a heavy news flow week as we head into the June expiry on Thursday, says CNBC-TV18s managing editor Udayan Mukherjee.
Earlier expectations were that eurozone policies will hold the key for a global risk on rally, but given that expectations have been raised by the Prime Minister himself, all market participants will be looking that way to provide some kind of triggers for the index.
There may be action on the currency front as well because the rupee closed at 57 plus last week. The government and the RBI Governor all seem to be sitting up now and taking notice of how swiftly the rupee has taken out 57. So we may hear some announcement first the RBI and then may be even the FM that might provide some kind of trigger for the market, at least in the near term.
From the global space, it is increasingly appearing that we will not get a whole lot from the euro leaders, but that remains another important cue. So this week is probably policy week in terms of local and global triggers.The price action seems to suggest that the market is not expecting very big things from the euro meetings and the summits this time around. They did do a little bit along expected lines, which was to ease off the collateral norms for euro banks, but that will not help a whole lot. They are talking about a relief package or a stimulus package of about 130 billion euro, but that also did not seem to send the stocks off on a great rally. So a 1% of euro GDP stimulus package is not likely to change the complete face of what one should expect in terms of euro economic data over the next few months and quarters.
So having seen what came out of the last meeting, the market now is increasingly beginning to feel that may be the next summit will be pretty