Macro-data, parliament session to steer equity indices
Mumbai: Upcoming macro-economic data points, coupled with the commencement of parliament's winter session and global cues, especially crude oil prices, are expected to determine the trajectory of the key equity indices in the coming week.
According to market observers, other factors like the expectations on the outcome of the Gujarat assembly elections, along with the direction of foreign fund flows and the rupee's movement against the US dollar will also impact investors' risk-taking appetite.
"The macro-economic data, trend in global markets, investment by FPIs (foreign portfolio investors) and DIIs (domestic institutional investors), the movement of rupee against the US dollar and crude oil price movement will dictate trends on the bourses next week," D.K. Aggarwal, Chairman and Managing Director of SMC Investments & Advisors, told IANS.
"In the coming week, Nifty is expected to trade in the range of 10,100-10,400 points."
In terms of economic indicators, the automobile industry's November sales data and Balance of Trade figures are expected to be released on Monday.
Other macro-data points like the IIP (Index of Industrial Production) and CPI (Consumer Price Index) will be released by the Central Statistics Office (CSO) on December 12 (Tuesday), followed by the Commerce Ministry's release of WPI (Wholesale Price Index).
"The outcome of the Gujarat state election will be next important event for the market. Though the outcome of election has no meaningful impact on the economy, the market will be waiting to react to the political stance. For the week ahead, IIP, CPI and WPI data are key," Vinod Nair, Head of Research at Geojit Financial Services, told IANS.
Besides the macro-data points, further appreciation in the rupee's value against the US dollar and likelihood of foreign fund inflows can enhance investors' participation.
On a weekly basis, the Indian rupee strengthened by only two paise to close at 64.45 against the US dollar from its last week's close at 64.47.
"Next week, we expect the rupee to trade strong as market prices in the strong possibility of a NaMo victory in the state elections. Over the next week, we expect a range of 64.25-64.60 on spot," Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities said.
"In case 64.25 support gives way, we expect rupee to head to 63.80 levels."
In addition to Indian currency, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) off-loaded stocks worth Rs 4,772.85 crore.
Figures from the National Securities Depository (NSDL) revealed that FPIs divested equities worth Rs 4,088.89 crore, or $634.5 million, from December 4-8.
On the technical charts, the NSE Nifty shows an underlying downtrend.
"Technically, while the Nifty has bounced back smartly, the underlying trend remains down," said Deepak Jasani, Head of Retail Research for HDFC Securities.
"The Nifty would need to cross the previous intermediate highs of 10,410 points to reverse the current downtrend. Immediate supports to watch for resumption of weakness is at 10,094 points."
Last week, the key Indian equity indices -- the BSE Sensex and the NSE Nifty50 -- rose on the back of global cues, along with healthy influx of DII funds and expectations of a political victory for BJP in the Gujarat assembly elections.
Consequently, the 30-scrip Sensitive Index (Sensex) of the BSE rose by 201.26 points, or 0.61 per cent, to close at 33,034.20 points.
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Similarly, the Nifty50 of the National Stock Exchange (NSE) edged higher by 143.85 points, or 1.42 per cent, to close the week's trade at 10,265.65 points.