NEW DELHI: Indian stock markets are likely to be largely driven by the release of Gross Domestic Product (GDP) data for the April to June period, which is expected this week. While existing factors like the US-China trade war and rising crude oil prices will continue to have an impact on market sentiments, GDP data is seen as vital in preserving positive sentiment.
“Macroeconomic data will dictate trend in the near term. On the economic front, the government will announce data on second-quarter GDP on Friday. However, markets will continue to remain volatile as traders will roll over their positions in the F&O segment from August to September series,” Rahul Sharma, senior research analyst at Equity99, said.
Besides the GDP, analysts and investors are also likely to keep a close watch on how the Indian Rupee moves. Sharp dives in rupee values versus the US dollar over the last few weeks have already exacerbated fears of a high Current Account Deficit. The Indian currency slumped to a lifetime low of 70.32 on August 16, 2018.
“Fundamentally, we are seeing a continuous rise in crude oil and accumulation has been seen at lower levels. This will ‘hurt’ the short-term upward momentum as a higher crude price will certainly have an impact on India’s CAD, inflation and rupee,” Epic Research CEO Mustafa Nadeem said.
The result of the progression of the ongoing trade war between the US-China will also be a major factor in how the global markets move this week. The trade war further escalated last week after both sides slapped each other with 25 per cent tariffs on imports worth $16 billion. Talks held between the two nations last week to find a solution to the trade dispute have also remained inconclusive.