Fed decision, macro data to drive markets this week

Fed decision, macro data, earnings to play major role in market movement this week: Analysts

Important earnings are lined up this week including names like HDFC, IRCTC, Tata Motors, Bharti Airtel

Bombay Stock Exchange (BSE) building in Mumbai. Credit: Reuters File Photo

The Fed interest rate decision, domestic macroeconomic data announcements and quarterly earnings will be the major sentiment drivers for the equity market in a holiday-shortened week ahead, analysts said.

Investors will also take cues from the monthly auto sales numbers to be announced on Monday.

Equity markets will remain closed on Thursday for Diwali Laxmi Pujan and on Friday for Diwali Balipratipada.

"Due to the festival of Diwali, markets will have a truncated three-day trading session this week.

"Key events to watch out for this week will be India's PMI data for October and US Fed meeting which will provide some direction to the market," Siddhartha Khemka, head (retail research) at Motilal Oswal Financial Services Ltd, said.

Selling by foreign funds, weak global markets and mixed earnings weighed on market sentiments last week.

"This is going to be a truncated week on account of Diwali where the market is heading this festival season with a mood of profit-booking.

"The week will start with auto sales numbers for October where expectations are low, while the market will also gauge the consumers' sentiments on Dhanteras and Diwali," Santosh Meena, head (research) at Swastika Investmart, said.

Important earnings are lined up this week including names like HDFC, IRCTC, Tata Motors, Bharti Airtel, HPCL, Sun Pharma, Eicher Motors and SBI, he added.

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Yesha Shah, head (equity research) at Samco Securities, said, "Although the trading week ahead will be shorter than usual, it can undoubtedly be eventful. The news flow and market sentiment may be largely dominated by the upcoming FOMC (Federal Open Market Committee) meeting."

Shah added that Indian automakers will report their monthly sales figures.

"Despite the advent of the festive season, shortages of semiconductors, rising freight and commodity prices may continue to squeeze margins and weaken sales," Shah added.

Last week, the 30-share BSE benchmark tumbled 1,514.69 points or 2.49 per cent.

"Markets are expected to remain bearish in the short term due to profit-booking across various sectors and weak global cues.

The Q2 result season is in progress with the market getting mixed responses from companies declaring their results. Along with the corporate earnings, the market has to deal with macro numbers," Rahul Sharma, co-founder of Equity99, said.

Vinod Nair, head (research) at Geojit Financial Services, said India's manufacturing and services PMI data to be released this week will be a key indicator in determining the economic progress for October.

"Additionally, decisions of the Fed in its meeting this week will be a major factor that will drive global equities in the coming days," he added. 

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