GDP data, RBI meet among key factors that may guide D-Street this week
GDP growth rate slipped to 4.5% in the July-September quarter, lowest in over 6 years.
The Monetary Policy Committee of the Reserve Bank of India is also scheduled to meet this week.
Besides these, increasing tensions between the US and China will also dictate the movement of benchmark indices.
Going by the buzz on Dalal Street, here are the key factors that will guide the market next week:
GDP growth rate slumps
A disappointing set of economic growth data released on Friday may have an impact on markets next week. India’s GDP growth rate slipped to 4.5 per cent in July-September quarter, lowest in over six years. This dismal performance highlights declining consumer demand. However, the experts this was expected.
Core sector output drops
The core sector output fell for another month, as the index tracking eight core sectors shrank 5.8 per cent in October, as per data released on Friday. Coal production declined by 17.6% in October vs a degrowth of 20.5 per cent. Crude Oil production declined by 5.1 per cent in October 2019 over October 2018.
October steel output contracted to -1.6 per cent vs -0.3 per cent, cement output contracted to -7.7 per cent vs -2.1 per cent and natural gas output contracted to -5.7 per cent vs -4.9 per cent in September.
RBI policy meet
Monetary Policy Committee of the Reserve Bank of India will meet from December 3-5 and announce its decision on the final day of the meet. With further slowdown in the economic growth rate, analysts are expecting another rate cut. In this year, the central bank has already cut policy rate by 135 points.
"The slowdown in consumption is indeed worrying, as its revival is important for investment to pick up. The Private Final Consumption Expenditure (PFCE) declined to 5 per cent YoY compared with 9.7 per cent. With the growth slipping to 4.5 per cent, it is expected that the RBI will go for the next round of rate cut in December," said Deepthi Mary Mathew, Economist at Geojit Financial Services.
Indian automakers will report their sales numbers for November on Sunday and Monday. After festive season induced uptick in October, market participants will keep an eye on auto sales numbers to see whether the sector turned a corner last month or not.
Tensions between US and China
Increasing tensions between the US and China over former’s backing of protests in Hong Kong has put the progress in trade deal in jeopardy. In the past week, both nations assured of progress in trade deal but with US President Donald Trump signing a law supporting protests, China warned of an appropriate response. The US and China have been involved in a bitter trade war that has impacted the global economy.
A host of data from across the world will be released this week. Starting from India, Nikkei PMI manufacturing and services data for November will come out. PMI numbers for Germany, UK, Japan and other European area economies will also be released this week. On Tuesday, Australia will release its new policy rate while on Wednesday GDP growth rate.
Oil producing group Opec and its allies will meet on December 5 to decide on the crude production levels. The grouping has sent more signals that they’ll stick with existing output cuts at their meeting next week. Lower crude oil prices are positive for importing countries such as India.