The Indian stock markets is likely to have a volatile week ahead as a host of factors, both local and global, may drive sentiment investor sentiment in the coming days. Last week, the BSE Sensex had managed to add 1.08% to close at 40,793.81, while the Nifty50 climbed 1.19% to 12,056.05. Though gains were capped by the selling pressure in Friday’s trade due to caution ahead of gross domestic product (GDP) data. For this week, here are the five most important factors that will set market direction:
1. GDP data: As the market opens on Monday, December 2, the first reaction will come on the Q2 GDP numbers. India’s GDP grew 4.5% in July-September 2019, the lowest since the fourth quarter of 2012-13, confirming fears of a deepening slowdown in the economy. India is now staring at a sub-6% annual GDP growth in 2019-20, the first since 2012.
2. Auto sales: The monthly sales data for auto companies for the month of November will also be in focus. Maruti Suzuki on Sunday said its November sales fell 1.9% year-on-year, while Tata Motors Ltd reported a 25.32% decline in sales. Apart from these two, investors should keep an eye on Ashok Leyland, Mahindra and Mahindra, Bajaj Auto, Hero MotoCorp, Eicher Motors, TVS Motor, etc.
3. RBI Policy: The key event of the coming week would be three-day Monetary Policy Committee (MPC) meeting of the Reserve Bank of India that will begin on 3 December and the decision on interest rates will be announced on 5December.Considering the low economic growth, analysts are largely expecting RBI to cut the repo rate by another 25 bps and continue with its accommodative stance.
4. CSB Bank’s listing: On 4December, Kerala-based CSB Bank will make its debut on the bourses after raising Rs 410crore through a public issue that saw a massive subscription of 87 times. Meanwhile, the initial public offering of Ujjivan Small Finance Bank, a subsidiary of NBFC Ujjivan Financial Services, will also be open for subscription on 2December at a price band of Rs 36-37 per share. All brokerages have advised subscribing the issue for listing gains as well as for the long term.
5. US-China deal: Globally, investors are eagerly waiting for a partial trade deal between the US and China, but the rising risk of retaliation from China after the US signed two bills in support of Hong Kong protesters raised uncertainty over the deal. Experts feel if both countries fail to sign the deal by mid-December, then the US would continue with additional tariffs on Chinese products.