MPC, macro data, Covid-19 to dictate market trends this week: Analysts

The MPC's interest rate decision, a host of macroeconomic data announcements, Covid-19 trends and global factors would be the major highlights in the equity market this week, analysts said

The MPC's interest rate decision, a host of macroeconomic data announcements, COVID-19 trends and global factors would be the major highlights in the equity market this week and their outcome would be a major driving force going ahead, analysts said.

"This week marks the beginning of the new month also and a lot of important macroeconomic data and events are lined up. On the macroeconomic front, we have GDP data for the first quarter, core sector data, Markit Manufacturing PMI and services data scheduled during the week," said Religare Broking Vice-President (Research) Ajit Mishra.

He also added monthly auto sales numbers will also start pouring in from June 1. Importantly, the Monetary Policy Committee (MPC) review meeting is also scheduled this week, Mishra added.

"Expectations of state-wise unlocking due to declining COVID-19 cases are giving hopes of economic recovery.

"As the result of a decline in the COVID-19 second wave infection curve, the plausibility of further re-opening of the economy has enlarged and consequently the market is expected to gain further momentum surpassing previous highs," said Geojit Financial Services Head (Research) Vinod Nair.

RBI interest rate decision on Friday would be a major event watched by investors.

"The overall structure of the market remains positive as fresh COVID-19 cases continue to decline and investors are upbeat about unlocking of the economy in June which will help revive commercial activities.

"This week RBI's MPC would be the key monitorable," Motilal Oswal Financial Services Head (Retail Research) Siddhartha Khemka said.

During the last week, the 30-share BSE benchmark rallied 882.40 points or 1.74 per cent.

"Going forward, likely announcement of phased withdrawal of state-level lockdowns in coming weeks and likely recovery in economic activities can potentially aid market to sustain rally in the near to medium term," Reliance Securities Head (Strategy) Binod Modi said.

Movement of the rupee, Brent crude and foreign institutional investors investment trend would also be looked at by market investors for further direction.