Auto sales, GDP print & other macro data among 5 factors that will chart market direction in truncated week

A slew of announcements by Finance Minister Nirmala Sitharaman to boost the economy lifted benchmark equity indices higher during the week gone by for the first time in three.

BSE Sensex advanced 631 points, or 1.72 per cent, to 37,332.79 for the week, while Nifty added 193 points, or 1.79 per cent, to 11,023.

The market started the week on a strong note after the government rolled back the enhanced surcharge on foreign portfolio investors on August 23. RBI’s announcement of a Rs 1.76 lakh crore surplus transfer to the government further lifted sentiment.

In the coming week, markets will remain closed on Monday on account of Ganesh Chaturthi. Going by the buzz on Dalal Street, here are the five factors that are likely to chart market direction in the week ahead.

Auto sales number likely to be bleak

Auto shares will remain in focus as car and bike makers will release their monthly sales numbers for August starting from Monday. Motilal Oswal Securities said its channel checks indicated no sign of demand recovery at retail levels, as inquiries-to-sales remains tepid.

Macroeconomic data releases

Lots of macroeconomic data will be announced during the week, starting with the core sector growth data for July. Market participant will also watch the Markit Manufacturing PMI for August, which is slated for released on Monday. The IHS Markit India Manufacturing PMI rose to 52.5 in July 2019 from 52.1 in the previous month, as both output and new orders expanded a bit faster despite a slowdown in export sales amid subdued global trade flows. Services PMI data for August will be announced on September 4. The IHS Markit India Services PMI jumped to 53.8 in July 2019, easily beating market consensus of 50.4 and pointing to the quickest increase in output in one year, amid a promising government Budget and strengthening demand.

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PM visit to Russia

Market participants will also keep a watch on Prime Minister Narendra Modi’s visit to Russia on September 4-5, which will open a new chapter between the two countries as both sides will aim to expand cooperation in a number of areas, including defence, trade, civil nuclear energy and hydrocarbons.

GDP at six-year low

Benchmark equity indices will on Tuesday react to the GDP data that came out after market hours on Friday. Gross domestic product (GDP) print released by the National Statistical Office showed growth in the first quarter of the financial year slipped to an over six-year low of 5 per cent.

Milan Vaishnav, Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, said, “In the coming week, the markets will also digest a worsening of the slowdown as reflected in the GDP numbers. We expect a soft start to the trade on Tuesday as the market adjusts to the global trade setup during the extended weekend.”

Global cues

On the global front, macroeconomic data from the US starting from PMI Manufacturing Index and construction spending on Tuesday followed by international trade, Redbook, Beige Book on Wednesday, ADP Employment Report, jobless claims, factory orders, Fed Balance Sheet, money supply on Thursday and finally Baker-Hughes Rig Count on Friday will keep market participants busy.


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