Analysts Expect Global Macro Data Along With Foreign Trading Activities To Drive Market

Macroeconomic data like the S&P Global services PMI, and the US jobs data will provide valuable insights into the Fed’s outlook on the monetary policy.

Macroeconomic data announcements and foreign investors’ trading activities will drive the equity market in the week, analysts stated. Market experts estimate that global trends will also leave an impact on the markets. 

The stock markets finally gained about a per cent last week after putting an end to their five-week losing streak, closing on a sharp rebound last Friday. The BSE benchmark climbed 500.65 points or about 0.7 per cent last week, while the Nifty gained 169.5 points or 0.87 per cent.

Looking at the global end, analysts noted that issues in China’s real estate market, volatility in the dollar index, and the US bond yields will leave their mark and shape the market throughout the week, reported PTI. 

Further, macroeconomic data like the S&P Global services PMI, and the US jobs data will provide valuable insights into the Fed’s outlook on the monetary policy, stated Swastika Investmart Ltd.’s senior technical analyst, Pravesh Gour. 

On the domestic front, the services sector’s purchasing managers’ index (PMI) data will be released on Tuesday. Additionally, the markets will be focused on major macro numbers coming in the week, including the Eurozone S&P global composite PMI, crude oil prices, foreign institutional investors (FII), and domestic institutional investors (DII), among others. 

Geojit Financial Services’ head of research, Vinod Nair, noted, “In the absence of any major triggers from the domestic market, sentiments will be driven by global cues, including the release of US payroll and PMI data.”

Additionally, the fluctuations in crude oil and rupee’s movement against the US dollar will leave an impact on the trading patterns in the market. Shrikant Chouhan, head of research (retail) at Kotak Securities Ltd. noted, “After a sluggish to negative sentiment last month, foreign investors could be looking at Indian markets with fresh optimism once again, as the nation continues to overcome global economic challenges and perform well on most economic parameters. While foreign investors have already been net buyers of local shares in the past five sessions, the recent macroeconomic numbers like strong Q1 GDP growth, robust August GST collections, and upbeat PMI data for last month should bolster their confidence in local markets.”

Notably, manufacturing gained momentum in the country in August, on account of new orders and output grew at the quickest rate in almost three years, a survey revealed last week, the report added. The GST collections in the country also grew by 11 per cent in August to more than Rs 1.59 lakh crore, helped by an improvement in compliance and a reduction in evasion. Experts predict this momentum to carry forward in the upcoming festive season.