The formation of the new government at the Centre along with GDP data and derivatives expiry will dictate the trends of the Indian equity market in the coming week.
The BJP-led National Democratic Alliance (NDA), whichcomprehensively won the just concluded Lok Sabha elections, will soon form thenew government and appoint key Union Ministers.
“Now the focus of the market should be on economicgrowth cycle besides other factors such as fiscal consolidation, infrastructurespending, inflow of FDI and strong foreign policies,” said D.K. Aggarwal,Chairman and Managing Director, SMC Investments & Advisors.
“Investors would also keep close eye on the progress ofmonsoon at home, and global factors such as crude oil prices, US Fed and tradetension,” Aggarwal said.
Besides, the new government’s plans for likely fiscalsupport measures will be eyed by the investors, as a slowdown has becomeevident in sectors such as automobile, FMCG and aviation.
Vinod Nair, Research Head, Geojit Financial Services, said:”The domestic market is likely to benefit from higher inflows from FIIs onaccount of political stability and expectation of growth.
“The downside risk of the market will be protected byextension in economic reforms and pick up in earnings from H2FY20 onwards. Therisk taking ability has come back…”
Apart from political developments, crucial data points aboutthe country’s ‘fiscal deficit’, ‘index of eight core industries’ and the Q1 GDPgrowth rate will be keenly watched by the market participants.
In terms of quarterly results, companies like Abbott India,Bharat Heavy Electricals, Emami, GAIL, Interglobe Aviation, Punjab NationalBank, SpiceJet, Sun Pharma, GMR Infra, M&M and Power Finance Corp areexpected to announce their fourth quarter (Q4) earnings results in the comingweek.
On the currency front, the Indian currency last weekstrengthened by 30 paise to close at 69.53 against the US dollar from itsprevious week’s close of 70.23 per greenback.
“Expect rupee to trade between 69.20 and 70.20 range…Expect a rate cut in the coming monetary policy which can lead to some weaknessin currency,” said Sajal Gupta, Head, Forex and Rates, EdelweissSecurities.
On technical charts, the NSE Nifty50’s intermediate trendremains bullish.
“Technically, with the Nifty surging higher this weekon the back of the election results and touching new life highs, theintermediate trend remains firmly up,” said Deepak Jasani, Head of RetailResearch, HDFC Securities.”Further upsides are likely in the comingweek once the immediate highs of 12,041 are taken out. Crucial supports are at11,591,” Jasani added.