Markets to focus on Fed rates action, domestic macro data
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Mumbai: It is expected to be an action-packed week for the markets on both domestic and global fronts. Focus will be on a slew of domestic macroeconomic data, monsoon progress and US Federal Reserve’s monetary policy.
The Fed is likely to raise the benchmark interest rate for the second time this year after its two-day meeting of the Federal Open Market Committee (FOMC) on Wednesday. In March, the central bank had hiked rates by 25 basis points on expected lines.
Teena Virmani, vice-president, private client group research, Kotak Securities Ltd, said, “Going ahead, markets will focus on the policies of President (Donald) Trump along with US Fed rate hike decision. Impact of UK election results on Brexit negotiations along with oil price movement are also crucial for the markets. Domestically, markets will watch for progress and geographical spread of monsoons as it will be important for agri-related, cement, automobile and FMCG companies.”
According to a PTI report, India Meteorological Department (IMD) said that southwest monsoon is making steady advance into Maharashtra and West Bengal.
Banks stocks are likely to be in focus as finance minister Arun Jaitley will meet heads of PSU banks on Monday to discuss non-performing assets (NPAs) plaguing the sector. The FM is also expected to review the financial performance of all the public sector banks (PSBs) and steps taken by them for recovery of bad loans which have crossed Rs6 trillion.
Among macroeconomic data, the government will announce industrial production data for the month of April on Monday. The data on inflation based on Consumer Price Index (CPI) or retail inflation and inflation based on Wholesale Price Index (WPI) for May are slated to be released and trade data for the same month will be out on Thursday.
The Reserve Bank of India (RBI) expects retail inflation to fall to 2-3.5% in the first half of FY18 and inch up to 4.5% in the latter half. Its earlier projection for retail inflation for the first half of the fiscal was 4.5% and 5% in the second half.
CPI inflation eased to 2.99% and WPI inflation was at 3.85% in April. Industrial output in March increased to 2.7% from 1.9% in February.
In the primary markets, telecom equipment maker Tejas Networks Ltd will launch its initial public offering (IPO) on Wednesday with Rs250-257 per share. The issue will close on Friday.
Ahmedabad-based pharma company Eris Lifesciences Ltd will be launching its IPO on Friday with a price band of Rs600-603 per share to raise Rs1,741.1 crore at the upper end of the price band.