Macroeconomic data, progress of monsoon rains, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses next week.
The progress of monsoon rains will be closely watched. The India Meteorological Department (IMD) said that for the country as a whole, cumulative rainfall during this year’s monsoon upto 13 September 2017 has been 6% below the normal rainfall. The June-September southwest monsoon is critical for the country’s agriculture because a considerable part of the country’s farmland is dependent on the rains for irrigation.
On the global front, the US Federal Reserve’s Federal Open Market Committee (FOMC) starts its two-day meeting on interest rates on Tuesday, 19 September 2017. The US Federal Reserve will announce its interest rate decision on Wednesday, 20 September 2017. The Federal Reserve had raised the target range for its federal funds rate by 25 basis points to 1% to 1.25% during its June 2017 meeting.
The Bank of Japan (BoJ) will announce its interest rate decision on Thursday, 21 September 2017. The BoJ had left its key short-term interest rate unchanged at -0.1% at its July 2017 meeting, as widely expected.
Manufacturing production in Hong Kong increased by 0.4% in the second Q2Fy17 compared with a year earlier, following a 0.2% gain in the previous period. It is the biggest increase in manufacturing output since the Q2Fy14 as production continued to rise for food, beverages and tobacco.
Industrial production in Japan declined by 0.8% (M-o-M) in July 2017, in line with the preliminary figure and following a 2.2% increase in a month earlier,
Foreign direct investment into China declined by 0.2% (Y-o-Y) to USD 83.66 billion in January to August 2017, following a 1.2% drop in the first seven months of the year. In August alone, FDI increased by 9.1% (Y-o-Y).
China’s industrial production rose 6% (Y-o-Y) in August 2017, following a 6.4% increase in the prior month and missing market expectations of 6.6%. It was the weakest gain in industrial production since December 2016.
Stocks of crude oil in the United States jumped by 5.888 million barrels in the week ended September 8th, 2017, following a 4.58 million rise in the previous period and compared to market expectations of a 3.238 million increase. It is the biggest gain in inventories in six months.
U.S. stock benchmarks finished in the green on Friday, posting sharp weekly gains, with a big assist from rallying telecommunication and bank shares as Wall Street shook off North Korea’s latest missile launch. On weekly basis, Dow Jones rose by 2.16% and Nasdaq rose by 1.39% in the last week.
The Sensex and Nifty rose by 1.85% and 1.51% respectively in the last week.
Consumer prices in India increased 3.36% (Y-o-Y) in August 2017, following a 2.36% rise in July 2017 and above market expectations of 3.2%. It is the highest inflation rate since March 2017, due to a rebound in food prices.
Industrial production increased 1.2% (Y-o-Y) in July 2017, in line with market consensus and following an upwardly revised 0.2% drop in the previous month.
Wholesale prices in India rose 3.24% (Y-o-Y) in August 2017, following a 1.88% increase in the prior month and above market estimates a 3% gain. It was the highest wholesale inflation since April 2017, due to a surge in prices of food and fuel.
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Industry and Stock Specific trends
The sectoral indices closed in positive territory last week. The S&P Bankex, PSU, Auto, IT and Oil & Gas indices rose by 1.77%, 1.66%, 1.54%, 0.6% and 0.89% respectively in last week.
Indian rupee depreciated by 0.34% against USD, USD/INR pair closed at 64.08.