It’s slated to be a data-heavy week, despite being shortened by a day’s holiday on account of Dussehra and Mahatma Gandhi Jayanti.
Market analysts expect the stock markets to be influenced by the Reserve Bank of India’s (RBI) latest interest rate decision, global trends dominated by US tariff-related developments, trading activity of foreign investors and most importantly, macroeconomic data streaming in, such as industrial production and HSBC PMI manufacturing data.
Ajit Mishra – SVP, Research, Religare Broking Ltd, agrees that both domestic and global cues will dictate the markets’ momentum.
“Markets step into a data-heavy week, where both domestic and global cues will dictate momentum. On the domestic front, industrial production data and the RBI’s policy decision will be in focus, along with the expiry of September derivatives contracts, which could add to volatility,” he said, adding that globally, it will be the usual US-India trade deal that will continue to be closely tracked.
Also Read: US Fed meeting, WPI inflation to drive stock markets this week
The India-US trade talks are back on the table, with both countries agreeing to continue negotiations for early conclusion of a mutually beneficial bilateral trade agreement, the Commerce Ministry said on Friday.
“At this point, all eyes are on the US-India trade relations for a possible relief rally. On the domestic front, the upcoming RBI policy on October 1 is crucial, with the street divided on whether a rate cut will materialise. IIP data and festive season sales updates will also be important triggers,” pointed out Santosh Meena, Head of Research at Swastika Investmart.
Globally, US macro data, dollar index movement, and crude oil prices will drive near-term direction. Above all, FII flows remain the key determinant for market trend, Meena added.
Last week, the BSE benchmark tanked 2,199.77 points or 2.66 per cent and the NSE Nifty dropped 672.35 points or 2.65 per cent.
Vinod Nair, Head of Research, Geojit Investments Limited said Indian equities closed the week on a subdued note with major broad-based sectoral declines, especially in the IT index.
“The IT index came under early pressure amid concerns over rising H-1B visa costs, compounded by Accenture’s subdued outlook. Sentiment weakened further as fresh US tariffs on pharmaceutical products led to a sharp sell-off in pharma counters. Mid- and small-cap stocks corrected more sharply than large caps, reflecting stress from their stretched valuations. Moreover, the rupee continues to weaken, weighed down by ongoing FII outflows and heightened geopolitical risks stemming from US trade actions,” he recounted.
In contrast, gold sustained its appeal as a safe-haven asset, supported by global trade tensions, a depreciating rupee, steady central bank purchases, and uncertainty over the Fed’s policy path, Nair said.
Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, too believes it is the RBI’s interest rate decision that will weigh heavily on markets.
“In terms of macro-economic data, markets will track RBI’s interest rate decision on October 1st, the US consumer confidence data and manufacturing PMI of India, China, and the US,” he said.
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