Will markets rise next week?

Key data to be watched for is

This week global money markets will be watched closely for cues on the credit crisis. If overnight borrowing costs ease further, it would be the first sign of a bottoming out in equity markets. The unlocking of credit markets would mean fresh flows of money into equities.

This week, investors would be riveted to RBI’s mid-term monetary policy review on 24 October to see what the central bank does, especially against the backdrop of an industrial slowdown and tremors in the services sector. A cut in interest rates by 50 basis points (one basis point is one-hundredth of a percentage point) is most likely and already factored in by the street. Any additional aggressive measures by the bank would boost sentiment and may trigger bargain buying.