Market Anticipates RBI Policy Amid GDP Slowdown

Indian stock indices await RBI's upcoming monetary policy following a slowdown in GDP growth to 5.4%, the lowest in two years. The recent market gains are overshadowed by investor uncertainties regarding economic data and potential rate changes.

As Indian stock indices brace for the Reserve Bank of India's (RBI) forthcoming monetary policy decision, investors are grappling with a recent deceleration in GDP growth to 5.4%, marking the slowest pace in two years. This economic backdrop sets the stage for a critical week beginning Monday, driving market participants to seek fresh cues.

Despite recent market weaknesses, indices such as the Sensex 30 and Nifty 50 have rallied, posting cumulative gains of 1% over the past week. However, the releases of key data and events in the coming days, particularly the RBI's monetary policy review, dominate investor focus. According to Ajit Mishra, SVP of Research at Religare Broking Ltd, the central bank's interpretation of economic signals, especially regarding interest rates, will be pivotal.

High-frequency indicators including auto and cement sales, and HSBC's Manufacturing and Services PMI data, are equally crucial. Foreign inflows are also under the lens as they continue to impact sentiment, albeit at a reduced pace since mid-November. Economic stability hinges on continued robust data, with experts like Vinod Nair of Geojit Financial Services highlighting the anticipated RBI meeting in early December and its potential implications on monetary policy.

(With inputs from agencies.)