RBI rate decision, global cues, earnings to keep markets volatile

New Delhi: The RBI's interest rate decision, US-China trade conflict and quarterly earnings would influence trading in the equity markets this week, say analysts.

Participants will also keep an eye on taxation issues following reports that the Prime Minister's Office and the finance ministry have held talks regarding tax surcharge on FPIs announced in the Budget.

However, the key trigger this week is likely to be the Reserve Bank's three-day policy meeting, beginning Monday (August 5).

The central bank is expected to cut the benchmark interest rate for the fourth time in a row to boost the economy at time when key indicators are pointing towards a slowdown, experts said.

"The market is now awaiting the RBI meet which is scheduled this week," said Mustafa Nadeem, CEO, Epic Research. PMI data for the services sector is due on Monday, which would also influence trading sentiment, according to marketmen.

According to Arun Thukral, MD and CEO, Axis Securities, "The recent correction has been driven by various factors -- global weakness, selling by FPIs along with signs of a slowdown in domestic economy.

Having breached the psychologically crucial levels, markets are expected to be volatile in the near term."