New Delhi, December 1
Domestic stock indices are now awaiting RBI monetary policy decisions, for fresh market cues, during the week that starts Monday.
Inida's Gross Domestic Product (GDP) witnessed a setback, by hitting 5.4 per cent which is the slowest growth in two years
Post weakness in recent weeks, the domestic stock markets staged some comeback during the past week with most of the indices posting weekly gains. The Sensex 30 and the Nifty 50 indices gained 1 per cent during the week cumulatively, marking the second consecutive week of advances amid mixed cues.
"The upcoming week brings key data releases and events. Participants will first react to the GDP data released post-market on Friday. The primary focus will be on the RBI MPC's monetary policy review, where policymakers' interpretation of the GDP data and their stance on the rate trajectory will be crucial," said Ajit Mishra - SVP, Research, Religare Broking Ltd
"Additionally, high-frequency indicators such as auto and cement sales, along with HSBC Manufacturing and Services PMI data, are expected to provide further market direction. Foreign inflows will also remain in focus as a major driver of sentiment," added Mishra.
Foreign portfolio investors turned net sellers in India for the second straight month in November, but the pace of sell-off slowed in the second half of November.
"With results season behind us, the focus has now completely shifted on the domestic and global macro factors. The RBI MPC will be holding its meeting in the first week of December 2024. With the rise in inflation in recent months, the rate cut cycle is expected to start only next year," said Shrikant Chouhan, Head Equity Research, Kotak Securities.
The next RBI monetary policy review meeting is scheduled for December 4-6.
Indian stocks have been quite volatile for the past few weeks. Recent bearish trends have been attributed to fund outflows, lower-than-expected Q2 earnings by India Inc., and persistently high inflation.
Sensex closed at 79,746.24 points, up 702.50 points, while Nifty closed at 24,131.05 points, up 216.90 points on Friday, ahead of the GDP data which later showed India to have grown by 5.4 per cent as against RBI's forecast of 7.0 per cent.
The Sensex remains nearly 6,000 points below its all-time high of 85,978 points.
"Stability in the market will depend on the steadiness of the incoming economic data next week. While the market is likely to witness some repercussions from the fall in Q2 FY25 GDP to 5.4 per cent. On the other hand, investors will be more inclined to act on the upcoming RBI monetary policy. Though the consensus shows status quo, the probability of a rate cut in February is high due to the subdued growth in Q2," said Vinod Nair, Head of Research, Geojit Financial Services.