Key global events, inflation data to weigh on Sensex, Nifty this week
G7 summit in Canada, the Trump-Kim summit in Singapore, and policy action of the US Federal Reserve are set to weigh in on Indian markets this week
Mumbai: Several global events, including the Group of Seven, or G7, summit in Canada, the Trump-Kim summit in Singapore, and policy action of the US Federal Reserve are set to weigh in on Indian markets this week.
At the G7, US President Donald Trump threw into disarray the G7’s efforts to project a united front as he said he might double down on import tariffs on the automotive sector. He backed out of the G7 joint communique, collapsing the fragile consensus on trade between Washington and its top allies. He left the G7 summit early.
Market watchers will be also keenly observing the meeting between Trump and North Korean leader in Singapore on Tuesday. In an ideal scenario, Kim would agree to abandon all of North Korea’s nuclear capabilities in return for Trump easing sanctions on his economy.
The US Federal Reserve, meanwhile, will begin its two-day monetary policy meeting on Tuesday and is expected to raise interest rates for a second time this year, and the seventh since December 2015. Rising interest rates may lead to a flight of foreign investment from emerging markets, including India.
Back home, progress on monsoon and domestic macro data will be key for markets this week. Investment services company Geojit Financial Services’s Vinod Nair said progressing monsoon and positive outlook on rural markets are giving a boost to the Indian economy.
“Whereas, the risk of downgrade in FY19 earnings followed by weak fourth quarter earnings will test investors sentiment. Additionally, cues from economic data like CPI, IIP & WPI data this week will also be a determining factor in the market movement,” he added.
Inflation data based on the wholesale price index (WPI) for May will be released on Thursday. Inflation based on wholesale prices touched a four-month high of 3.18% in April on increasing prices of petrol and diesel as well as fruits and vegetables. The WPI inflation stood at 2.47% in March and 3.85% in April last year. 58%.
Reuters and Bloomberg contributed to the story.