RBI's monetary policy review holds key

Mumbai, July 29: After wrapping up the previous week in the red, the markets this week will closely watch the monetary policy review of the Reserve Bank of India (RBI) due on Tuesday, experts pointed out and said the Central Bank is likely to keep the rates steady.

''However, it remains to be seen whether it will raise cash reserve ratio (CRR) to suck out excess liquidity in the banking system,'' market pundits observed.

The 30-share BSE Sensex lost 330.98 points or 2.13 per cent to touch 15234.57 on profit booking, while the S&P CNX Nifty lost 120.85 points or 2.6 per cent to touch 4445.20 last week. Prior to this, the market had been posting weekly gains since the past six weeks.

Latest official data released on Friday showed India's wholesale price index (inflation) rose 4.41 per cent, higher than the previous week's 4.27 per cent due to increase in food prices. The inflation is within the central bank's medium-term target of 4-4.5 per cent and annual target of 5 per cent for this fiscal, economists said and added that Union Finance Minister P Chidambaram had hinted recently that high crude oil and food prices did not necessary mean that money policy would be tightened further.

Among the frontline companies, Bharat Heavy Electricals, Bharat Electronics, Mahindra&Mahindra, Cairn India and i-flex Solutions, will declare their June 2007 quarter results this week.

Gujarat Mineral Development Corporation, India Cements, Balkrishna Industries, Bharati Shipyard, Dredging Corporation of India, Gitanjali Gems, India Infoline, Indiabulls Real Estate, Nagarjuna Construction Company, Wanbury, Asian Electronics, Development Credit Bank, Ashapura Minechem, Parsvnath Developers, Birla Corporation, Financial Technologies (India), Provogue (India), Madhucon Projects, Sterling Biotech and United Phosphorous, will also declare their result this week.

Oil prices have held firm above USD 75 a barrel amid fears that tight summer supplies would offset a fresh wave of risk aversion that struck US equities and dragged oil down a day ago. Any sharp rise from these levels, may dampen the sentiment, market analysts added.

UNI