8:48 AM
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 The Reserve Bank of India's (RBI) monetary policy meeting will set the direction for the stock market in the week ahead. Volatility is expected to spike this week as traders will rollover their futures and options positions to the next month series ahead of the July contracts expiry on Thursday. So far, rollover to the August series has been below average when compared to the same period in the previous monthly expirations. While some analysts say this could be because of higher rollover costs last week, others attribute this to the uncertainty over companies' earnings and the outcome of the RBI's policy meeting. RBI is expected on Tuesday to raise a key policy rate by 50-basis points, but investors are more keen to gain an insight on the central bank's views on inflation and interest rates. Some fund managers expect the RBI to tighten banks' lending to real estate companies in the form of higher provisioning. The central bank has been cautioning banks against 'overexposure' to the faltering real estate sector. Investors remain cautious about shares of property developers, but are more optimistic about banks. Sources said traders have created fresh long positions in Bank Nifty. "Traders are betting that 11000 is a strong support for Bank Nifty.A more encouraging trend for the bull camp is the squaring up of Nifty call options at 5600 and 5700 strikes and traders aggressively selling puts at 5600. The unwinding of call positions shows 5600 and 5700 may no longer act as strong resistance levels for the Nifty in the near future. Investors will closely watch the trends in earnings as the results season enters the last lap this week. RIL,HCL Tech,ICICI Bank,ONGC, Maruti Suzuki, HUL, ACC, ITC and NTPC, among others, are scheduled to announce results this week. |