D-Street week ahead: With Budget now behind, RBI policy review to take centre stage

All eyes will be on the Reserve Bank of India (RBI) on Dalal Street this week, after equity benchmarks finished the Budget week with gains of more than two percent. Besides, macroeconomic data, quarterly financial results and updates on the coronavirus pandemic will be in focus. Bond yields will also be on investors' radar.

Last week, the Sensex rose 1,444.6 points or 2.5 percent and the Nifty50 added 414.4 points or 2.4 percent led by broad-based gains. The Nifty Bank climbed up 1,010 points or 2.9 percent -- a second straight weekly gain. (Read more on the Budget week on D-Street)

The yield on the 10-year bond hit a two-year high after the government announced higher borrowing in its Budget for FY23.

"With the timeline set by the Fed for tightening, it would be crucial to see how the RBI's Monetary Policy Committee responds especially when the government has set the growth agenda in the Union Budget," said Ajit Mishra, VP-Research at Religare Broking.

A slew of companies are slated to report their earnings for the October-December period this week, including Bharti Airtel, Hero MotoCorp, Godrej Consumer, Mahindra & Mahindra, Ashok Leyland, TVS Motor, Divi's, ACC, Berger Paints, Dr Lal Pathlabs and IRCTC.

"The earnings season has been a mixed bag so far... IT and select private banking and auto companies have posted a decent performance... Consumer-driven sectors like FMCG, consumer durables and pharma have posted a muted show," said Mishra.

The Nifty50 appears to be facing resistance around its 20-day exponential moving average and forming a lower top, according to Yesha Shah, Head of Equity Research, Samco Securities.

Religare Broking's Mishra recommends focusing on sector-specific opportunities and keeping a check on leveraged positions. He sees support for the Nifty at 17,350 and 17,000 in case profit taking continues, and resistance in the 17,850-18,000 zone.

Feb 9: RBI rate decision

Feb 11: IIP data

*IPO in 2021

Bidding for Vedant Fashions' IPO will close on February 8, and the allotment of shares likely on February 11.

Adani Wilmar shares are likely to be listed on stock exchanges BSE and NSE on Tuesday.

Foreign fund flows will remain in focus. Last week, foreign institutional investors net sold Indian equities worth Rs 2.1 crore, according to provisional exchange data.