Macroeconomic data, corporate earnings likely to steer stock market

Key macroeconomic numbers are likely to drive stock in a holiday-shortened week ahead as quarterly earnings season is almost coming to an end and the Ayodhya verdict unlikely to have any major impact on overall investor sentiments, according to analysts.

Equity markets will be closed on Tuesday for "Gurunanak Jayanti".

Industrial production data on Monday, inflation rate on Tuesday and WPI inflation on Thursday would be keenly watched by market participants amid economic slowdown concerns.

Coal India Ltd, Hindalco Industries and NMDC are among the major companies set to announce their earnings this week.

Santosh Meena, Senior Analyst at TradingBells, said Ayodhya verdict would not have any impact on equity market until any social unrest arise in the country.

"It could have sentimental positive impact for incumbent BJP government. Otherwise, it won't have any major impact on the political front as well.

"Market is in bullish momentum where this momentum will continue," Meena added.

In one of the most important and much-awaited judgements in India's history, a five-judge bench of the Supreme Court headed by Chief Justice Ranjan Gogoi put an end to over a century-old dispute that has torn the social fabric of the nation.

The apex court said the mosque should be built at a "prominent site", allotted either by the Centre or the Uttar Pradesh government, and a trust should be set up within three months to build the temple at the site that, many Hindus believe, Lord Ram was born.

"Equity markets which are trading near all-time highs will be facing two important data this week which can act as a catalyst for an upside breakout or further pressure," Mustafa Nadeem, CEO of Epic Research said.

Developments related to US-China trade negotiations will also be tracked by investors, analysts said.

Besides, trend in rupee-dollar, crude oil and investment pattern by overseas investors will also be crucial for markets, they added.

Equity benchmark BSE Sensex tumbled 330 points on Friday after Moody's Investors Service cut the country's credit rating outlook to negative.

During the last week, the Sensex advanced 158.58 points or 0.39 per cent.

"While the lowering of rating outlook is negative, we believe that the government has been trying to stimulate growth... Government has taken various measures including one of the boldest reforms in the form of corporate tax cut," Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Private Ltd, said.

He noted that these measures would take time to work on the ground and that the near term concern is on the fiscal front, with lower tax incomes and higher spending leading to a ballooning deficit.