Macro data, Fed rate to dictate market

New Delhi: A string of key developments such as the announcement of macroeconomic data, monsoon progress and Fed interest rate decision will prove to be trigger points for the domestic bourses this week, say experts.

Besides, the country’s GST preparedness in the run-up to the July 1 rollout of the new indirect tax regime will also play a major role in market movements during the week.

“With the ECB meet and UK elections out of the way, focus this week will now shift to a slew of domestic macroeconomic data and US Federal Reserve's policy statement, which is due on Wednesday,” said Vijay Singhania, founder-director, Trade Smart Online.

Investors will also keep an eye on the progress of monsoon rains, he added.

In a major development that had a significant impact on the global markets last week, British electorate delivered a fractured mandate that led to a hung Parliament on Friday.

On the macroeconomic front, industrial output data for April is scheduled to come after market hours on Monday, while retail inflation numbers for May will also be announced the same day.

Data for inflation based on wholesale price index (WPI) for May is slated to release on Wednesday.

“Going ahead, markets will focus on the policies of President Donald Trump along with US Fed rate hike decision. Impact of UK election results on Brexit negotiations along with oil price movement are also crucial for the markets,” said Teena Virmani, VP — PCG Research, Kotak Securities.

“Domestically, markets will watch for progress and geographical spread of monsoons as it will be important for agri-related, cement, automobile and FMCG companies. GST council meeting to address concerns of some of the sectors will also be important for smoother implementation of GST by July,” Ms Virmani added.

The GST Council has already fixed rates for most items, paving the way for the implementation of the Goods and Services Tax regime from the next month.

“This week is likely to remain very crucial as several macroeconomic data are scheduled. On Monday, most important macroeconomic data i.e. IIP and inflation are expected. Further, progress in monsoon is also likely to provide direction to the surging indices,” said Abnish Kumar Sudhanshu, director and research head, Amrapali Aadya Trading and Investments.

“US FED interest rate decision and domestic IIP are the key data to be watched for in the week ahead,” said Vinod Nair, Head of Research, Geojit Financial Services.