NEW DELHI: Domestic equity benchmarks Sensex and Nifty managed to eke out gains for the week gone by despite a deep cut on Friday’s session.

However, gains were nominal as weak global sentiment and absence of any positive domestic trigger weighed on investor sentiment.

For the week, Sensex rose 77 points, or 0.21 per cent, to 36,546, while Nifty50 gained 49 points, or 0.45 per cent, to 10,943.

Macro numbers, global trend and crude oil prices are among the major themes that will influence the movement of the market in the coming week.

Let’s take a look at factors that may dominate market mood:

Budget session: The last Parliament session of the current NDA government is ending on Wednesday. Having announced several sops for farmers and the lower-middle class, in the run-up to the general elections, the market is not expecting any additional populist steps by the government, but as they say, politics is an unpredictable game.

Inflation print: The retail inflation and wholesale inflation prints for the month of January will set the tone for the market. Lower fuel prices further eased India’s retail inflation in December to 2.19 per cent from the annual rate of 2.33 per cent in November. The annual rate of inflation, based on monthly WPI, stood at 3.80 per cent for the month of December 2018 as compared to 4.64 per cent for November. The numbers may come out in a similar range for January too. Recently, the RBI cut its repo rate by 25 basis points considering the benign inflation level.

Consumer inflation numbers will be out on Tuesday, while wholesale inflation is scheduled to be unveiled on Thursday.

IIP data: The Index of Industrial Production (IIP) print for the month of December will be released on Tuesday. IIP growth stood at 0.47 per cent in November, with the high base of last year contributing to the slowdown, according to data released by the statistics office, mostly because of the contraction in the manufacturing sector as a post-festival season decline in manufacturing, fewer working days in the month and tighter financial conditions pulled down output. Manufacturing, which constitutes 77.63 per cent of IIP, shrank 0.4 per cent versus 10.4 per cent growth a year ago. A disappointing IIP data for the two consecutive months may not augur well for the market.

Global macro: UK’s fourth quarter GDP print will certainly catch eyes as a softer number may further aggravate the concerns of global economic slowdown after the European Commission last Thursday cut its growth forecast for the euro zone this year and the next, fanning worries that a global slowdown is spreading to Europe.

Moreover, China’s inflation data for January, Japan’s industrial production data for December and US Retail Sales for December are the major global macroeconomic numbers slated for release this week that will influence market movement.

US-China trade talk: As the recent meetings failed to offer any breakthrough, a new round of US-China trade talks is to begin on Monday. This is in the wake of the US President’s comment last week in which he negated any possibility of meeting his Chinese counterpart to resolve the issue before the March 1 deadline. A swift and timely resolution of the issue will be no less than manna from heaven for markets.

Earnings: Most heavyweights have released their October-December earnings so far. Among the leftovers, numbers of Coal India, Hindalco, Eicher Motors, ONGC and Sun Pharma will be closely watched by the market.

Technical outlook: Friday’s losses indicated a downside momentum for Nifty on technical charts. On the weekly scale, the index formed a ‘High Wave’ pattern, suggesting selling pressure at higher levels. Any negative close on Monday could see the index test its 200-DMA at 10,855, said Arun Kumar, Market Strategist at Reliance Securities.

Other than the above-mentioned factors, global markets sentiment, crude oil prices, rupee’s movement against the US dollar and the inflow/outflow of institutional investors will also have their say in the market.

Source