Home >Market >Stock-market-news >Q3 GDP data, global cues key triggers for markets this week

Mumbai: Domestic macro data and global cues are likely to be key triggers for the market in the week ahead as the Nifty stares at the 9,000 level. The 50-share index is a few steps away from touching its all-time high of 9,119 points.

Analysts expect March futures and options (F&O) series to kickstart on a strong note. Anand James, chief market strategist, Geojit Financial Services, said the market momentum may continue on abundant liquidity. “The recent market rally may continue as mid-caps continue to see good buying. There is a rebound in a few sectors as bargain hunting seeped in the market," James said. Last week, beaten down sectors IT and telecom saw recovery.

A major indicator of economic growth, gross domestic product (GDP) data for October-December quarter will be released by the Central Statistics Office (CSO) on 28 February. The Q3 GDP estimates will be very critical as the period covers demonetisation and will hint at the state of economy when the country was facing cash crunch.

According to SBI estimates, Q3 GDP growth will be at 5.8% and will recover to 6.4% in Q4. If GDP growth rate falls below 6%, it would be the lowest expansion in at least seven quarters. In July-September, GDP growth was at 7.3% from a year ago, making it the fastest-growing major economy in the world.

“For FY17, we believe GDP growth will recover to 6.4%. Overall, our estimate for H2 FY17 GDP growth is 6.1% with a downward bias. We estimate FY17 growth at 6.6%. The good news is that FY18 growth could move up faster if demand comes back faster post remonetisation," said Soumya Kanti Ghosh, chief economic adviser, economic research department, SBI, in a report. The report also said that sectors like construction, real estate, cement and FMCG (fast-moving consumer goods) are likely to witness a decline in sales in Q3 and to recover thereafter.

The market will also be eyeing auto sales data of February. According to the Society of Indian Automobile Manufacturers (SIAM), total two-wheeler sales in January declined 7.39% to 1,262,141 units as compared with 1,362,879 units in the year-ago month. It will be crucial for sales recovery in two-wheelers as the segment has been affected post demonetisation. Sales of commercial vehicles were down marginally at 61,239 units in January.

Technology stocks will be again in focus after Tata Consultancy Services Ltd (TCS) announced its buyback plans last week. Sitting on huge cash piles, IT stocks are under pressure to buy back shares from shareholders. Next in the queue is likely to be tech company Infosys Ltd as it has sought shareholders’ approval to change the company’s Articles of Association, which may include a provision for buyback. There were reports that Infosys may consider a Rs12,000 crore share buyback.

Globally, US President Donald Trump’s policy stance, especially on taxation, will be watched out by investors as he will address Congress for the first time on 28 February. The markets have been waiting for Trump’s policies on corporate tax reform or fiscal stimulus.

Other important factors this week will be few macro indicators of the US ahead of the Federal Open Market Committee meet on 14-15 March to decide on interest rates. Minutes from the FOMC’s last meeting showed interest rates hikes will happen again “fairly soon".

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