Stock markets are expected to remain under pressure this week due to the overhang of US presidential polls and uncertainty over global growth due to resurging cases of coronavirus, according to analysts.
The Russia-Ukraine conflict, which has spooked financial markets globally, will set the tone for Dalal Street this week amid concerns over energy prices and foreign fund outflows, analysts said. Participants will also track key macroeconomic signals like GDP estimates and PMI data for manufacturing and services sectors to be announced this week, they added. "With earnings season behind us and given the overall sentiments, markets are expected to move in sync with global peers in the coming week. "A close eye will be kept on the developments concerning the Russia - Ukraine crisis and considering the inflation overhang, market participants will also observe movements in energy prices," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
India's inflation trajectory in the coming months will be influenced more by the geo-political situation due to the war in Europe and its impact on supply chains and commodity prices. However, the country is better placed than most to "weather the storm" and achieve growth of close to 8 per cent in the current fiscal year, the finance ministry said in its latest monthly economic report on Thursday. "Through the channel of imports, elevated global crude and edible oil prices now have a significant impact on India's inflation outlook. "Government measures to keep the prices of these commodities in check, along with the recent hike in policy rates by the RBI, are expected to temper inflationary pressures in the economy," the monthly economic report for April, drafted by the finance ministry's economic division, said.
However, IT stocks fell on weak growth forecast by Gartner
The HSBC Emerging Markets Index, a monthly indicator derived from the PMI surveys stood at 52.6 in March, little unchanged from the February reading when it stood at 52.4, indicating a subdued rate of economic growth in global emerging markets.
The NSE Nifty also moved up by 12 points to 8,648.35.
Titan was the top gainer in the Sensex pack, rising over 3 per cent, followed by M&M, Reliance Industries, Axis Bank, TCS, Maruti and Infosys. NSE Nifty surged 122.10 points to 15,885.15.
Firms said subdued demand conditions, unfair pricing among competitors and economic woes affected the sector.
Indian economy is expected to grow 10.5 per cent or more in the current fiscal, Niti Aayog Vice Chairman Rajiv Kumar said on Thursday. Speaking at a virtual conference organised by the Public Affairs Forum of India (PAFI), he also said that modernisation of the retail sector is very much on the cards. "India Purchasing Managers' Index (PMI) for both manufacturing and services has shown a very smart uptick last month. "This (Indian economy) will strengthen even further," he said. "I expect Indian economy to grow 10.5 per cent or higher in FY 22," he noted.
On the macroeconomic data front, PMI data on manufacturing and services sector will also influence trading
The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector firms on a monthly basis, stood at 48.7 in January, as against 46.8 in December 2016.
The Nikkei India Services PMI posted above the critical 50.0 level, which separates growth from contraction, for the fourth month running in May.
Marking its quickest rise in over seven years, India's services sector activity expanded for the fifth successive month in February, tracking spike in business orders, renewed export demand and strengthening business confidence, a monthly survey showed on Wednesday. The IHS Markit India Services Business Activity Index rose from 55.5 in January to 57.5 in February. This is the fastest expansion in services output since January 2013.
A reading above 50 indicates expansion while a one below this level means contraction.
The recovery in the Indian services sector was sustained in November as new work orders supported business activity growth and the first rise in employment in nine months, a monthly survey said on Thursday.
The broader NSE Nifty closed below the 10,600 mark by plunging 98.15 points, or 0.84 per cent, to 11,582.35 after shuttling between 11,567.40 and 11,751.80.
Business confidence remained positive in August and was driven by upbeat forecasts of sales, an expected improvement in demand and promotional activities
Bumper liquidity as a result of global central bank stimulus measures should prevent a sharper downturn.
TCS was the top gainer in the Sensex pack, rising around 2 per cent, followed by ONGC, SBI, L&T, Infosys, HCL Tech, ICICI Bank and Axis Bank. The broader NSE Nifty surged hit a record high of 14,109.40.
Forex traders said a stronger dollar also dragged the rupee down.
India's services sector activity surged to a seven-year high in January driven by sharp increase in new business orders, leading to job creation and business optimism amid favourable market conditions, a monthly survey said on Wednesday. The IHS Markit India Services Business Activity Index rose from 53.3 in December to 55.5 in January, signalling the strongest upturn in output in seven years.
Markets will remain closed on Thursday, 12 November 2015 on account of Diwali Balipratipada.
India's services sector activity expanded at a slower pace in December as rates of growth in sales eased to a three-month low and staff hiring came to a halt amid weak business optimism, a monthly survey said on Wednesday. The seasonally adjusted India Services Business Activity Index fell from 53.7 in November to 52.3 in December. The index was above the critical 50 mark that separates growth from contraction for the third month in a row during December, but pointed to the slowest pace of expansion in the three-month sequence.
Manufacturing production growth eased in May, which combined with the slowdown in services resulted in a weaker increase in private sector output, the survey said.
The 30-share Sensex was up 137 points at 19,517 and the 50-share Nifty was up 45 points at 5,780.
The upcoming corporate results season and the approaching Union Budget kept investors on their toes
The 30-share Sensex ended up 106 points at 20,898 and the 50-share Nifty ended up 42 points at 6,217.
'The large scale and widespread shrinking of the labour force in November, the peaking of unemployment in October and the fall in lead indicators in October and November point towards a worsening of the slowdown of the Indian economy in the third quarter of 2019-20,' says Mahesh Vyas.
Tata Motors, ONGC, HDFC and TCS were the top gainers.
Meanwhile, outlook for global emerging markets remained relatively weak in September.
The survey noted that advertising campaigns supported the increase in new work growth in the sector amid competitive pressures.
The upcoming general elections will be the focus and the economy and market performance will pivot around that event. The general consensus is that the India stock market should be up around 10 per cent by the end of the year.
Leading indicators suggest economic activity has been disrupted after demonetisation.
The services sector had slipped into contraction in July as confusion caused by the GST rollout triggered a dip in new business orders.
Private sector output in India expanded for the first time in 8 months in February as slump in the services sector moderated and manufacturing grew at a stronger pace, an HSBC survey said.
Participants are keenly awaiting the rollovers to the next series ahead of the expiry of June F&O.
Of the BRIC (Brazil, Russia, India and China) economies, China, Russia and Brazil posted sharper increases in activity, but India registered a fourth successive decline in output.
Investors indulged in buying beaten down blue chips at lower and attractive levels.
Service providers' confidence with regard to the 12-month outlook for business activity remained positive.
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