Markets To Take Cues From Economic Data, US Central Bank Rate Move: Experts

New Delhi, June 11 (PTI): A string of key developments such as the announcement of macroeconomic data, the progress of monsoon rainfall and a decision on the interest by the Federal Reserve in the United States will prove to be trigger points for the domestic bourses in the week starting June 12, according to experts. Besides, GST preparedness in the run-up to the July 1 rollout of the new indirect tax regime will also play a major role in market movements during the week.

“With the ECB meet and UK elections out of the way, focus this week will now shift to a slew of domestic macroeconomic data and US Federal Reserve’s policy statement, which is due on Wednesday,” said Vijay Singhania, founder-director of Trade Smart Online.

Investors will also keep an eye on the progress of monsoon rains, he added.

In a major development that had a significant impact on the global markets, British electorate delivered a fractured mandate that led to a hung Parliament on Friday.

On the macroeconomic front, industrial output data for the month of April is scheduled to be released after market hours on Monday, while retail inflation numbers for May will also be announced the same day.

Data for inflation based on wholesale price index (WPI) for May is slated to release on Wednesday.

“Going ahead, markets will focus on the policies of President Donald Trump along with US Fed rate hike decision. Impact of UK election results on Brexit negotiations along with oil price movement are also crucial for the markets,” said Teena Virmani, vice president-PCG Research at Kotak Securities Limited.

“Domestically, markets will watch for progress and geographical spread of monsoons as it will be important for agri-related, cement, automobile and FMCG companies. GST Council meeting to address concerns of some of the sectors will also be important for smoother implementation of GST by July,” Ms Virmani added.

The GST Council has already fixed rates for most items, paving the way for the implementation of the Goods and Services Tax regime from the next month.

“This week is likely to remain very crucial as several macroeconomic data are scheduled. On Monday, most important macroeconomic data i.e. IIP and inflation are expected. Further, progress in monsoon is also likely to provide direction to the surging indices,” said Abnish Kumar Sudhanshu, director and research head at Amrapali Aadya Trading and Investments.

“US Fed interest rate decision and domestic IIP are the key data to be watched for in the week ahead,” said Vinod Nair, head of research at Geojit Financial Services.

Both the BSE and NSE indices – Sensex and Nifty – recorded their first weekly fall in five weeks by losing 11.23 points, or 0.03 per cent and 14.75 points, or 0.15 per cent.