Markets will continue to see volatility ahead of the RBI's Policy meet scheduled for Tuesday. Markets are not expecting any action and status quo is likely to be maintained in terms of interest rates as the RBI has already cut interest rates out of the policy in Jan.
Banking stocks have been moving up ever since the Reserve Bank of India cut interest rates by 25 basis points. On Friday there was a reality check as banking stocks were hammered down when non- performing asset at banks came in worse than expected.
First, Oriental Bank of Commerce disappointed and this was followed by Union Bank of India, Bank of Baroda and ICICI Bank. The latter two were major disappointments to say the least.
It would be difficult to see a sharp recovery in banking stocks next week.
Technology shares would continue to hog the limelight as HCL Tech reported block buster set of results. Do not be surprised if we see another round of buying in tech stocks.
Global Cues Important
Global Cues will also play a part. Statements coming from the government in Greece on doing away with austerity measures may dampen sentiments. Results from major corporates in the US could drive sentiments there and impact other markets. Also watch out for data from Europe.
It's clearly going to be a volatile week for markets. For the first time in several trading days we saw some serious selling pressure from FIIs. If you think that they will keep buying stocks endlessly you may be mistaken.