In a holiday-shortened week, the markets may take a upward journey even as it was trading lower in Monday's trade due to weak Asian cues after Chinese data came in lower and also owing to chaos in Hong Kong. Nonetheless some of the below given factors may maintain momentum in Indian stock markets going forward.
On November 12, stock markets will remain shut for Guru Gobind Singh Jayanti.
In the week gone by the Sensex after scaling to a record high of 40,749.33 reversed its gains on the back of sovereign rating downgrade by the Moody's which sees India's economy to move on slowly in growth terms.
1. FII flow: The FII flow has been consistent and in the ongoing month the foreign flows have come in at Rs. 12000 crore. And as there is progress in US-China and Brexit front, the move is likely to impact other Asian economies including India positively. Also, reforms in the domestic front and the latest announcement of Ayodhya verdict is expected to augur well for both Indian economy and markets.
2. Corporate earnings to improve going ahead: Though the recent cut in corporate tax was not reflected prominently in the results of the quarter ended September but the same is expected to show in the H2FY20 with better earnings number on account of improvement in global economy, good monsoon season and a cut back in interest rate. For the current improvement in earnings, the results had already been priced in by market men and that was witnessed in respect of sharp rally of 4% since the start of Diwali festivity.
3. Auto sales for October: The data for auto sales number for October will be announced on Monday and it is expected that the festive season and steep discounts will likely improve the picture, which in the previous months has seen the industry to witness a 10 year low slowdown.
4. US-China trade deal: There is still nervousness around the long bruising trade war between the two leading economies even as Donald Trump over the weekend said that the progress has been very good. Nonetheless Chinese counterpart said wider conflicts between the world's two largest economies will continue. Furthermore, while Chinese nation expects a complete roll-back of tariff on Chinese goods, US does not seems to favour it and said China would like to get somewhat of a rollback, not a complete rollback, 'cause they know I won't do it. I haven't agreed to anything," he said.
5. IIP for September: The data is to be unveiled on November 11 and it may see further contraction. Due to the decline in the manufacturing index, IIP for August also slowed down to 1.1% in comparison to 4.8% in the same month in the year ago period.
6. CPI data to come up on November 12: The CPI for the month of October could trend higher even above the RBI's targeted levels owing to an increase in price of vegetables. WPI inflation however will be revealed on Nov 14 and is expected to come in flat at a nearly 3.5 year low.
Markets were largely rangebound and managed to cut back initial losses of the day as there were no major cues, Sensex was last trading lower by 0.21% or 82.92 points at 40240.69 while Nifty was down 0.24% or 28.45 points at 11879.70.