Trading sentiment in the equity market this week is expected to be shaped by global trends, foreign fund movements, macroeconomic data, and the Reserve Bank of India’s (RBI) upcoming interest rate decision, analysts have said. Key data releases, including monthly auto sales figures, are also likely to influence investor decisions.
According to Santosh Meena, Head of Research at Swastika Investmart Ltd., the markets are likely to respond to India’s GDP growth rate of 5.4% for the July-September quarter, which fell short of expectations. Investors will also be closely watching the RBI’s policy review, particularly the interest rate decision and the commentary accompanying it.
Geopolitical tensions, especially concerning Russia and Ukraine, remain a global concern. Domestic and international economic indicators such as India’s manufacturing PMI, US job data, and US Federal Reserve Chair Jerome Powell’s speech will play significant roles in guiding market sentiment this week, Meena added.
India’s GDP growth slowed to a near two-year low of 5.4% in the September quarter, primarily due to weak performance in the manufacturing and mining sectors, along with subdued consumption. Despite this, India remains the fastest-growing large economy, according to the latest data released on Friday.
The Indian equity market closed positively last week, with the BSE benchmark Sensex climbing by 685.68 points, or 0.86%, and the NSE Nifty gaining 223.85 points, or 0.93%, after a week of volatility.
Palka Arora Chopra, Director at Master Capital Services Ltd, noted that the outlook for the market will depend on critical data releases, including India’s manufacturing PMI, services PMI, and the RBI’s interest rate decision. Additionally, global data such as the US S&P Global Composite PMI, manufacturing PMI, services PMI, non-farm payrolls, and jobless claims will also be key to determining market direction.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, mentioned that market participants will react to the GDP data released on Friday, with a particular focus on the RBI’s monetary policy review. High-frequency indicators such as auto sales, manufacturing and services PMI, and foreign fund inflows will provide further direction.
Analysts also highlighted that fluctuations in global oil prices, particularly Brent crude, and the rupee-dollar exchange rate will influence market trends in the coming week.