InvestorQ : What do you think will be the big influence for markets in the coming week? Will it be FPI flows, bond yields or will it be auto sales numbers?
shrinidhi Rajan made post

What do you think will be the big influence for markets in the coming week? Will it be FPI flows, bond yields or will it be auto sales numbers?

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1 month ago
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Nifty and Sensex dropped sharply during the week by over 3% but most of the damage and more happened just in one single day on Friday. Also, Friday marked the sharpest single-day fall in the Sensex since the last 10 months and that is what makes the fall pretty significant. That makes the coming week starting on 01 March extremely important in terms of setting the trajectory for March trading and also the strategy for the month.

Global cues will be critical in the week. Apart from the highly critical bond yields and FPI flows, the focus will be on US yields, US PMI data, jobs data and housing starts, China growth and exports data and the statements coming from the central banks of the US and Europe. Of course, the two key factors for investors will be FPI inflows, after the heavy selling on Friday, and direction and pace bond yields that are making stocks unattractive.

The market is also likely to react to GDP data growing at 0.4% for Dec-20 quarter. The street was expecting the GDP for the quarter to grow at 0.5%. The only redeeming feature was that it came after 2 consecutive quarters of negative GDP growth and that sets the recession worries to rest. However, it must be noted that this growth was largely on account of lowering the growth for Q3 FY20, without which GDP would have contracted in FY21.

There will also be additional data points that will drive the markets in the coming month. One such key data point will be the auto sales numbers on Monday where demand has shown traction in the last few months and markets will hope for that story to continue for some more time. Apart from the PMI numbers, markets will also watch for global oil and commodity prices, especially in the light of the airstrikes in Syria. 

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