Fed decision, macro data, gains play a major role in market moves this week: Analysts

The Fed’s rate decision, announcements of domestic macroeconomic data and quarterly earnings will be key drivers of stock market sentiment in a short holiday week ahead, analysts say.

Investors will also consider monthly car sales figures to be released on Monday.

Stock markets will remain closed for Diwali Laxmi Pujan on Thursday and for Diwali Balipratipada on Friday.

“Due to the festival of Diwali, the markets will have a shortened three-day trading session this week.

“The key events for this week are India’s October PMI data and the US Fed meeting, which will give some direction to the market,” said Siddhartha Khemka, head of (retail research) at Motilal Oswal Financial Services Ltd.

Selling by foreign funds, weak global markets and mixed earnings weighed on market sentiment last week.

“This is going to be a shortened week due to Diwali where the market is heading this festival season with a mood of profit posting.

“The week kicks off with car sales figures for October, where expectations are low, while the market will also gauge consumer sentiments about Dhanteras and Diwali,” said Santosh Meena, head of research at Swastika Investmart.

Major gains are lined up this week, including names such as HDFC, IRCTC, Tata Motors, Bharti Airtel, HPCL, Sun Pharma, Eicher Motors and SBI, he added.

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Yesha Shah, head of (equity research) at Samco Securities, said: “While the next trading week will be shorter than usual, it can undoubtedly be eventful. News flow and market sentiment could be largely dominated by the upcoming FOMC (Federal Open Market committee) meeting .”

Shah added that Indian automakers will report their monthly sales figures.

“Despite the advent of the holiday season, semiconductor shortages, rising freight and commodity prices may continue to squeeze margins and weaken sales,” Shah added.

Last week, the BSE benchmark with 30 stocks fell 1,514.69 points or 2.49 percent.

“Markets are expected to remain bearish in the near term due to profit postings across sectors and weak global signals.

The second quarter earnings season is underway and the market is getting mixed reactions from companies announcing their results. Beyond corporate earnings, the market is dealing with macro data,” said Rahul Sharma, co-founder of Equity99.

Vinod Nair, chief of research at Geojit Financial Services, said India’s manufacturing and services PMI data released this week will be a key indicator in determining economic progress for October.

“In addition, the decisions of the Fed at its meeting this week will be a key factor that will boost global equities in the coming days,” he added.

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