Global trends to dictate stocks this week: Analysts

Global trends to dictate stocks this week: Analysts

NEW  DELHI | SEPT 27, 2020:

Stock markets are expected to consolidate in near-term due to economic uncertainty and a host of factors such as RBI monetary policy, car sales and macroeconomic data and global cues would dictate the direction in this holiday-shortened week, analysts said.

They said that despite a relief rally on Friday markets are likely to remain volatile amid resurging coronavirus cases in Europe.

The RBI's monetary policy review on October 1 and auto sales numbers would be among the key events for investors. The RBI's monetary policy committee will be meeting for three days from September 29.

Indian equity benchmark index Sensex declined by 3.83 per cent or 1,457.16 points, and the broad-based Nifty tumbled 4.04 per cent last week.

The stock indices declined for six straight sessions to Thursday, plunging by more than 7 per cent due to growth concerns after a resurgence in coronavirus cases globally.

The markets, however, cut short their losses and rallied over 2 per cent on Friday after reports that the US lawmakers were working on a stimulus deal that could be voted on as early as this week.

"We expect the market to consolidate in the near term given the rising global virus cases, economic uncertainty and continuous FII selling for past few sessions, " said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

"This week, investors would watch out for GDP data of the US and the UK, PMI data for the US on the global front, while on the domestic front RBI's monetary policy along with infrastructure output would provide direction to the market."

The Purchasing Managers' Index (PMI) data for the manufacturing sector is scheduled to come on Thursday.

"This week, participants will be closely eyeing the outcome of MPC's monetary policy review meeting scheduled on October 1. Also, they would be eyeing auto sales number which, starts pouring in the first week of every month. On the global front, COVID-related updates and performance of world indices will also be in focus," Ajit Mishra, VP – Research, Religare Broking Ltd said.

Also, updates over the US stimulus measures would be tracked by investors.

Samco Securities, Senior Research Analyst, Nirali Shah said in this holiday-shortened week, markets are expected to be watchful of RBI's MPC meeting. Markets will remain closed on Friday for Mahatma Gandhi Jayanti.

"Despite the rally seen on Friday, the market is expected to remain volatile and directionless in the absence of solid triggers. Global cues will continue to be in focus as a resurgence in virus cases around the world, leads to more restrictions and more pressure on the economic recovery," Vinod Nair, Head of Research at Geojit Financial Services said. (PTI)

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