Markets To Eye Global Factors, Macro Data; Stimulus Measures May Lift Sentiment, Say Analysts
Equity markets will take cues from global developments and wholesale inflation data this week, while the third tranche of stimulus measures announced by the government may bolster sentiment, analysts said.
Finance Minister Nirmala Sitharaman on Saturday unveiled over Rs 70,000 crore of measures for exporters and the real estate sector, including about Rs 30,000 crore new spending in plans such as setting up of a stressed asset fund, as part of efforts to boost economic growth from a six-year low.
"The new measures announced by the FM send the clear message that the government is giving top priority to reviving growth in the economy. The measures relating to housing and export promotion like textiles will provide a big boost to employment too since these are labour-intensive industries.
"The Rs 10,000 crore fund for providing last mile funding for stalled non-NPA, non-NCLT (housing) projects needs to be specially appreciated," said VK Vijayakumar Chief Investment Strategist at Geojit Financial Services.
On the global front, geopolitical tensions in the Middle East ratcheted up after Yemen's Houthi rebels carried out drone attacks on two major oil plants in Saudi Arabia, affecting more than half of the Kingdom's output and putting upward pressure on global oil prices.
Any spike in crude oil rates will affect the fiscal position of net energy importers like India. Brent crude has been trading at $60 per barrel levels.
Participants will also track WPI inflation data scheduled to be announced on Monday.
"Going ahead, we have important numbers such as WPI inflation, food and fuel, but we see trade war, global markets taking the spotlight. The market is poised to follow the path of how global markets respond and move," Mustafa Nadeem, CEO, Epic Research said.
Factors such as movement of rupee against the U.S. dollar and foreign capital flows will also influence trading sentiment in the market.
Meanwhile, global markets will also focus on the U.S. Federal Reserve's interest rate decision and Federal Open Market Committee economic projections.
Signs of easing U.S.-China trade tensions boosted the domestic equities last week. During the last week, the Sensex advanced 403.22 points or 1.09 per cent. On Friday, it closed at 37,384.99, up 280.71 points.
Jimeet Modi, Founder and CEO, SAMCO Securities and StockNote, said markets are waiting for the festive season to gauge how consumer spending pans out and whether there is a change in sentiments at the bottom of the pyramid.