India Market Outlook for the week - 12 to 16.12.2016
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The share indices are seen opening lower on Monday in reaction to a disappointing set of India's industrial growth data for October, which was released after market hours yesterday. Growth in the industrial output unexpectedly shrunk 1.9% in October as against a growth of 9.9% a year ago, and a 0.3% growth estimated by economists. The de-growth was largely due to a 2.4% contraction in the manufacturing sector and a 25.9% contraction in the capital goods sector. After a knee-jerk reaction to the data, equities may turn choppy as focus of investors would shift to US Federal Reserve chair Janet Yellen's speech due on Wednesday, following the central bank's two-day meet. Investors across the globe have factored in a 25-basis-point hike in interest rate by the US Fed and, therefore, an announcement to that effect is unlikely to move markets significantly. The US Fed's two-day meeting will begin on Tuesday. The US dollar index, which measures the movement in the greenback against six major currencies, was marginally up ahead of the US Fed's meeting. At 1754 IST, the dollar index was up 0.4% at 101.46. The worry is that if the dollar index continues its upward move, the rupee is likely to weaken along with currencies of emerging markets. This may put some pressure on Indian shares. Benchmark indices, which closed with marginal gains, reflected the cautious mood in the market. Despite marginal gains, benchmark indices ended at a near onemonth high. This is because of buying by domestic funds and foreign institutional investors. Foreign investors were net sellers in the domestic equities last month. The longest selling spree by the foreign institutional investors in nearly two decades came to an end this week after they turned net buyers of local shares this month, having net bought shares worth $74.91 mln. Even with FIIs turning net buyers, market participants are cautious as other domestic and global factors can likely pull down the markets.
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India Market Outlook for the week - 12 to 16.12.2016
The share indices are seen opening lower on Monday in reaction to a disappointing set of India's industrial growth data for October, which was released after market hours yesterday. Growth in the industrial output unexpectedly shrunk 1.9% in October as against a growth of 9.9% a year ago, and a 0.3% growth estimated by economists. The de-growth was largely due to a 2.4% contraction in the manufacturing sector and a 25.9% contraction in the capital goods sector. After a knee-jerk reaction to the data, equities may turn choppy as focus of investors would shift to US Federal Reserve chair Janet Yellen's speech due on Wednesday, following the central bank's two-day meet. Investors across the globe have factored in a 25-basis-point hike in interest rate by the US Fed and, therefore, an announcement to that effect is unlikely to move markets significantly. The US Fed's two-day meeting will begin on Tuesday. The US dollar index, which measures the movement in the greenback against six major currencies, was marginally up ahead of the US Fed's meeting. At 1754 IST, the dollar index was up 0.4% at 101.46. The worry is that if the dollar index continues its upward move, the rupee is likely to weaken along with currencies of emerging markets. This may put some pressure on Indian shares. Benchmark indices, which closed with marginal gains, reflected the cautious mood in the market. Despite marginal gains, benchmark indices ended at a near onemonth high. This is because of buying by domestic funds and foreign institutional investors. Foreign investors were net sellers in the domestic equities last month. The longest selling spree by the foreign institutional investors in nearly two decades came to an end this week after they turned net buyers of local shares this month, having net bought shares worth $74.91 mln. Even with FIIs turning net buyers, market participants are cautious as other domestic and global factors can likely pull down the markets.
