The domestic worries for the rupee are - maturity of forex swaps with oil firms of USD 7 billion in February-April with oil marketing companies (OMCs) having already covered up to 50 percent of the oil swaps that come due in February-March, bank and corporate forex repayments of USD 4.8 billion in March, possibility of withdrawal of gold import curbs which is unlikely to happen if the currency is down to the 68 level.
FIIs will be the point of focus, they have pulled out USD 1 billion from Indian debt markets last week,. The recent pull-out has brought the monthly purchases of FIIs in debt to around USD 2 billion. In stocks, their monthly net purchases for the month stand to meagre USD 85.4 million in January as of Thursday last. The aversion of FIIs would continue to impact the stock markets and expectations are that we are not going to see strong inflows at least till the parliamentary elections are over and would depend on the formation of the new government in May 2014. This will ensure that the market will remain range bound till the out of the results.
As for data due this week we have auto companies declaring their monthly volume sales numbers for January along with HSBC Manufacturing PMI on Monday (Dec 50.70) and HSBC Services PMI on Wednesday (Dec 46.70).As for the earnings season on, the key results this week are Monday – Lupin ; Wednesday – BHEL , Power Grid, Ranbaxy; Thursday – ACC , Ambuja Cements , Bank of Baroda .
As for global indicators, we have in US, key non-farm payroll and unemployment data will be released on Friday. The BoE will announce its latest interest rate and asset purchase policy decisions on thursday.Again onThursday , ECB will announce their latest decision with regards to monetary policy crucial in light of the latest inflation figure out of the Eurozone, which saw inflation fall back to 0.7 percent