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Data, derivatives and direction of funds to steer equities

NSE, BSEBy Porisma P. Gogoi,

Mumbai : GDP data for the second quarter of the 2017-18 fiscal, along with expiry of derivatives and the movement of foreign funds, are expected to be the main indicators to give direction to the key Indian equity indices in the upcoming week.

Apart from global cues, over the coming weeks, markets will seek direction from future events like the Reserve Bank of India policy meet during the first week of December and the Gujarat elections the following week.

“Focus in the coming week will be on the GDP numbers for the September quarter due to be released on November 30. Consumption growth is likely to be impacted by GST implementation during Q2FY18 and private sector capex continued to remain weak,” Teena Virmani, Vice President – PCG Research at Kotak Securities, told IANS.

“RBI policy in the first week of December and Gujarat elections in the second week are also being eyed closely. The rise in crude prices has left very little scope for RBI to cut rates in the upcoming meeting,” said Virmani.

Virmani pointed out that at the global level, the movement of oil prices will be closely watched as geo-political tensions in the Middle East are likely to remain supportive of oil prices in the run-up to the November OPEC (Organisation of the Petroleum Exporting Countries) meeting.

Other analysts have noted the November derivatives’ expiry and the direction of the flow of funds as the major triggers for the week starting November 27.

D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, said: “The Indian markets may remain volatile as investors churn portfolios ahead of the monthly derivatives contract expiry on Thursday.”

“Also, the flow movement of foreign funds and domestic funds will play a critical role in giving direction to the market,” Aggarwal told IANS.

Provisional figures from the stock exchanges showed that domestic institutional investors (DIIs) bought scrips worth Rs 2,925.56 crore during last week. However, foreign institutional investors (FIIs) continued to remain net sellers, shedding stocks worth Rs 1,870.27 crore.

Figures from the National Securities Depository Ltd. (NSDL) revealed that foreign portfolio investors (FPIs) invested in equities worth Rs 2,106.45 crore, or $325.16 million, during November 20-24.

“Technically, with the Nifty rallying after two weeks of losses and also breaking out of the recent narrow trading range, the bulls seem to be in control. Further upsides are likely once the immediate resistance of 10462 is taken out,” Deepak Jasani, Head of Retail Research for HDFC Securities, told IANS.

Last week, the equity indices rode the bulls pursuing the optimism on a sovereign ratings upgrade of the Indian government’s bonds by US credit rating agency Moody’s a week before, supported by a further thrust given by continued buying by DIIs.

On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) closed higher from its previous week’s close by 336.44 points, or one per cent, at 33,679.24 points.

The broader Nifty50 of the National Stock Exchange (NSE) edged higher by 106.1 points, or 1.03 per cent, to close the week’s trade at 10,389.70 points.

(Porisma P. Gogoi can be contacted at porisma.g@ians.in)

—IANS

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