India's debt markets will likely focus on the cash situation with the government clamping down on spending. Repo bids hover over Rs 1 lakh crore and dealers will look at the possibility of any open market operations.
The Reserve Bank of India's cut in cash reserve ratio (CRR) will become effective only on February 9, injecting Rs 18,000 crore of liquidity in the system.
The rupee is expected to hold in a broad range of 52.50 to 53.70 against the dollar next week.
India's plan to raise about $2 billion through a stake sale in power producer NTPC Ltd will likely take place on February 7, according to sources. Dollar inflows towards the stake sale in NTPC Ltd are expected to keep the rupee in a bullish mode.
Trading is expected to remain cautious next week as a sudden slump in share price of Tata Motors and Ultratech Cement in late market hours on Friday would make investors take cautious bets.
Shares are expected to trade in a narrow range as sentiment remains muted after the central bank's comments on Tuesday and as traders watch out for earnings of auto major Mahindra & Mahindra and cement companies including ACC.
Market participants will watch for any announcement from the government about the upcoming budget.
Copyright @ Thomson Reuters 2013
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