inflation-data-key-factor-driving-stock-markets-this-week

Even as investors keep their eyes peeled on global trends and more quarterly earnings reports, incoming inflation data will be key in determining where the stock markets are headed in the coming week, say analysts.

“This week will be crucial, with several key macroeconomic data releases scheduled. On the domestic front, focus will be on India’s CPI inflation and WPI inflation data, which will provide insights into the inflation trajectory and policy outlook,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

On the earnings front, quarterly results from prominent companies such as ONGC, Bajaj Finserv, Asian Paints, Tata Steel and Oil India will also be closely tracked for sectoral cues, Mishra added.

Trading activity of foreign investors has influenced equity markets for months now, dragging down stocks as investors continue to pull out investments.

Globally, the rupee-dollar trend and movement of Brent crude, which is the global oil benchmark, would also be crucial in driving investors’ sentiment.

 

Also Read: Major corporate earnings, trade news to drive stocks this week

“A slew of key domestic and global macroeconomic factors are expected to shape market sentiment in this week. On the domestic front, the upcoming release of October’s Consumer Price Index (CPI) inflation data will be closely watched, as it is likely to offer investors clearer insights into the future path of interest rates,” said Ponmudi R, the CEO of Enrich Money, an online trading and wealth tech firm.

With the ongoing US government shutdown prolonging, key economic data from the US, which is crucial to investors and policymakers in assessing the actual state of the economy, has been missing.

In the Indian stock markets, a holiday-shortened last week saw the BSE benchmark tanking 722.43 points or 0.86 per cent, and the NSE Nifty declining 229.8 points or 0.89 per cent.

“Going ahead, market direction will depend on upcoming domestic inflation data, FII flows, developments related to the US government shutdown, and progress in trade negotiations involving the US, India, and China,” observed Vinod Nair, Head of Research, Geojit Investments Limited.