Monetary policy, macro-data, monsoon to set equity markets' course (Market Outlook)

The upcoming monetary policy review coupled with the ongoing financial results season and key macro-economic data points will influence the trajectory of key equity indices in the week ahead, analysts opined.

According to market observers, direction of foreign fund flows, rupee's movement against the US dollar as well as global crude oil prices will also affect investors sentiments.

"The next week is dominated by macro data and RBI monetary policy meeting," Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.

"On the RBI policy, the markets are divided on policy rate hike in the next weeks meeting. The decision weightage given by MPC to core inflation is crucial and whether RBI changes its stance from neutral to hawkish. RBI is likely to be data dependent and cautious on hikes."

Besides the monetary policy review slated for July 31-August 1, investors will look out for macro-economic data points such as the eight core industries' (ECI) output and the country's fiscal deficit numbers.

In addition, the PMI manufacturing and services' figures, along with monthly automobile sales data will be released during the week.

Furthermore, companies like Axis Bank, HDFC, Idea Cellular, IndiGo, Piramal Enterprises, Tech Mahindra, EIH, Tata Motors, Vedanta, Reliance Infra, ONGC and SAIL are expected to announce their Q1 earning results next week.

"Going forward, besides the movement of rupee against the dollar and crude oil price movement, the next batch of April to June 2018 quarterly earnings and developments in monsoon session of parliament will dictate trend on the bourses next week," SMC Investments & Advisors Chairman and Managing Director D.K. Aggarwal told IANS.

On a weekly basis, the rupee strengthened by 19 paise to close at 68.66 from its previous week's close of 68.85 per greenback.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors bought scrip worth Rs 2,539.58 crore during the previous week.

As per technical charts, the underlying trend for the National Stock Exchange (NSE) Nifty remains bullish as it closed last week on a new record high.

"It could now face resistance at 11,410 points-level, while downside support is at 11,071-points-mark," said Deepak Jasani, Head of Retail Research at HDFC Securities.

Last week, the S&P BSE Sensex and NSE Nifty50 closed at their respective high levels on the back of healthy quarterly earnings and GST rate cuts on over 50 consumer items.

Consequently, the barometer 30-scrip Sensex of the BSE closed at 37,336.85 points -- up 840.48 points or 2.30 per cent from the previous close.

Similarly, the wider Nifty50 on the National Stock Exchange (NSE) settled at 11,278.35 points, higher by 268.15 points or 2.44 per cent -- from its previous week's close.

(Rohit Vaid can be contacted at rohit.v@ians.in <mailto:rohit.v@ians.in>)

--IANS

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