Indian stock markets are set to start trading this week amid positive news on the US-China trade war front and expectations of sops for the Indian automobile sector to revive sales. Early trends on the SGX Nifty hint at a positive opening for the benchmark S&P BSE Sensex and Nifty 50 indices on Monday. Notably, equity and forex markets will be closed for trading on Tuesday on account of Muharram. Here are the five key factors that may weigh on Indian stocks through the week:
— Investors will also be watching out for the release of macroeconomic data like the industrial production and manufacturing output numbers, along with inflation figures, which is scheduled for Thursday. Any negative or positive surprise there can weigh on the mood of the markets.
— Traders are hoping that the government this week may address concerns of the automobile industry by reducing goods and services tax (GST) for the sector. Relief measures are also expected in the real estate space. Any such measures would give a leg-up to stocks of both these sectors.
— Stocks of infrastructure and allied sectors may also stay in focus as the government on 7 September announced that it has constituted a high-level task force to identify infrastructure projects for Rs 100 lakh crore investment by 2024-25 as India aims to become a $5 trillion economy. The task force will draw up a ‘National Infrastructure Pipeline’ of Rs 100 lakh crore to step up investment in the sector.
— Progress in trade talks between the US and China is expected to boost investor sentiment. Strong inflows of foreign capital may change the direction of the market. Last week, continuing their selling spree, foreign investors withdrew a net sum of Rs 1,263 crore from the Indian capital markets even as the government rolled back enhanced surcharge on foreign portfolio investors.
— Data released last week showed that US job growth slowed in August, while retail hiring declined for the seventh straight month. Poor sets of macroeconomic data from major economies of the world have fanned hopes of government stimulus and rate cuts by central banks, which may led to a rally in global stocks, thereby pushing up Indian markets as well.
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