Do not expect a rate change from RBI: Axis Direct

Tuesday, 24 January. It's a date investors have been waiting for all month - it's the day the Reserve Bank of India will announce it decision on interest rates.

While the markets broadly expect no change in rates - no cash reserve ratio cut or repo rate cut - a small segment of market participants expect a cut in the cash reserve ratio (which is the proportion of deposits that banks must keep with the RBI as reserves), said Nilesh Shah of Axis Direct in an interview to CNBC TV-18.

 Do not expect a rate change from RBI: Axis Direct

All eyes and ears will be on the RBI tomorrow. Reuters

There will be a lot of focus on the RBI comments, in particular. It will be highly disappointing if the RBI continues to state that it is still bothered about inflation or that it hasn't come down to the levels expected.

Overall, markets will be looking at how the RBI plans to manage liquidity, inflation and growth.

Also, with respect to third-quarter earnings, he said the results, so far, have been ahead of expectations. However, from the second half of this month, India Inc's performance could get worse and that could upset the markets. The October-December quarter has been one of the worst quarters with respect to profitability, Shah added. However, in terms of outlook he is of the view that the fourth quarter should be better.

Watch the entire video below:

Updated Date: Dec 20, 2014 16:41:56 IST