Macro-economic data is pointing towards a scenario in which foreign funds and U.S monetary policies will determine the Indian equity market trajectory by next week, opined by expert analysts. In addition to that, the rupees movements against the US dollar, crude oil price fluctuation, as well as the U.S-China trade deals are likely to impact investors risk-taking capacities in India.
The Chief Marketing Strategist of Edelweiss Professional Investors Research told IANS:
“The major trend which is developing is a rally in the commodity markets, especially metals. The US dollar has begun to see overhead supply, EU economic data is improving. A phase 1 US-China trade deal and dovish US Fed may make this trend more visible," He further points out that Nifty has entered a new consolidated phase and a fresh up move could be expected by the end of December. Investors are eagerly waiting for the release of industrial production, retail and wholesale figures.
These data points are significant as the Reserve Bank in its last monetary policy kept lending rates intact thereby prioritizing rising inflation over grim economic growth. Next week the National Statistics Office is poised to release the macro-economic data point of Industrial production and consumer price index on December 12.
Research Head of Motilal Oswal Financial Services Sidharth Khemka said: "We expect the inflation to remain close to or above 5 per cent by March 2020, which means that a rate cut in the next MPC in February 2020 is highly unlikely,". Nifty has entered into a state of “engulfing bear” formation.