Macro-economic data to steer movement of Indian equities

Besides, fluctuations in rupee value, combined with cues from the US Federal Reserve over the likely rate hike and further developments on the demonetisation drive will be other major themes for the week starting from November 14. “This week the markets would focus on the rise in the US treasury yield, more details of the plans coming from the President elect of the US, the USD appreciation and the US Fed rate rise expectations,” Devendra Nevgi, Chief Executive of Zyfin Advisors said. 

“All of these factors are important for the global risk appetite and flows into the emerging markets, such as India. Domestically, the markets would adjust to the impact of the demonetisation measures on the economy and the cash intensive companies. Earnings would be key too.” Furthermore, the heightened expectations of a possible rate-hike in the US will keep investors jittery. A hike can potentially lead foreign portfolio investors (FPI) and funds away from emerging markets such as India. It is also expected to dent the business margins of corporate sector, as access to capital from the US will become expensive. 

“Expectations of fiscal expansion by Trump’s regime won’t put a cloud on EM equities for fear of outflows, but the US inflationary outlook has also received a boost thereby giving FOMC (Federal Open Market Committee) more room for hiking rates when it meets in December,” Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services said.