RBI policy, auto sales, PMI data among key factors that will steer Dalal Street next week

NEW DELHI: The domestic equity market was in a jubilant mood during the week gone by, ending with gains of over two per cent, which led both Sensex and Nifty to end at record highs of 38,800 and 11,500 levels, respectively.

Going into a truncated trading week, traders will keep an eye on RBI policy review, the outcome of which will be announced on Friday. Auto and cement sales data will also be in their radar. All equity, commodity and currency markets will be closed on October 2 for Gandhi Jayanti.

“We feel the forthcoming RBI policy meeting may trigger the next directional move,” says Ajit Mishra, Vice President for Research, Religare Broking. “Continue with stock-specific approach and focus more on the index majors for short-term trades,” he said.

Going by the buzz on Dalal Street, here are five factors that are likely to chart market direction in the coming week:

RBI rate-setting meeting: The Monetary Policy Committee (MPC) of RBI will announce its policy decision on October 4, Friday. The market expects another rate cut at this review, as economic growth rate has hit a six-year low amid a stable inflation rate. In August money policy, the MPC cut policy rate by 35 paise to 5.40 per cent. The MPC also decided to maintain an accommodative stance on money policy.

September auto, cement sales data: Cement and auto firms will release monthly sales data in the first week of October. Investors will keep an eye particularly on auto sales data as the sector has been going through a slowdown. Auto firms will try to make it big during the festive season that starts on October 29. “We expect September retail sales to witness an improvement over that of August," Maruti Suzuki Chairman RC Bhargava said earlier this week. “The booking levels have gone up compared with those last month, and have gone up substantially, and expectations are that 29th and 30th of this month will probably witness very high retail sales," he said

PMI data: A lot of high-frequency macro data is expected to pour in at the start of the month. First of all, investors will be eyeing the IHS Markit India manufacturing PMI, which is slated for release on October 1, 2019, followed by IHS Markit India Services PMI data, which will be released on October 04, 2019.

Global cues: On the global front, market participants would watch key macroeconomic data from the US starting from Redbook on October 1, followed by jobless claims, PMI services index, factory orders, Fed balance sheet, money supply on October 3 and finally International Trade and Baker-Hughes Rig Count on October 4.

Along with this, traders will also track developments in US politics regarding the impeachment inquiry on President Donald Trump. Further developments on the US-China trade war front will also give direction to the market.