Govt’s fresh stimulus package may lift market sentiment: analysts

PTI New Delhi | Updated on September 15, 2019 Published on September 15, 2019

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It also eyes global factors and macroeconomic data.

Equity markets will take cues from global developments and wholesale inflation data this week, while the third tranche of stimulus measures announced by the government may bolster sentiment, analysts said.

Finance Minister Nirmala Sitharaman on Saturday unveiled over ₹70,000 crore of measures for exporters and the real estate sector, including about ₹30,000 crore new spending in plans such as setting up of a stressed asset fund, as part of efforts to boost economic growth from a six-year low.

“The new measures announced by the FM send the clear message that the government is giving top priority to reviving growth. The measures relating to housing and export promotion like textiles will provide a big boost to employment too since these are labour-intensive industries.

“The ₹10,000 crore fund for providing the last mile funding for stalled non-NPA, non-NCLT (housing) projects needs to be especially appreciated,” said V K Vijayakumar Chief Investment Strategist at Geojit Financial Services.

Global factors

On the global front, geopolitical tensions in the Middle East ratcheted up after Yemen’s Houthi rebels carried out drone attacks on two major oil plants in Saudi Arabia, affecting more than half of the Kingdom’s output and putting upward pressure on global oil prices.

Any spike in crude oil rates will affect the financial position of net energy importers like India. Brent crude has been trading around USD 60 a barrel.

Macro data

Participants will also track WPI inflation data scheduled to be announced on Monday.

“Going ahead, we have important numbers such as WPI inflation, food and fuel, but we see a trade war, global markets taking the spotlight. The market is poised to follow the path of how global markets respond and move,” Mustafa Nadeem, CEO, Epic Research said.

Factors such as the movement of rupee against the US dollar and foreign capital flows will also influence trading sentiment in the market.

Meanwhile, global markets will also focus on the US Federal Reserve’s interest rate decision and the Federal Open Market Committee (FOMC) economic projections.

Signs of easing US-China trade tensions boosted the domestic equities last week. During the last week, the Sensex advanced 403.22 points or 1.09 per cent. On Friday, it closed at 37,384.99, up 280.71 points.

Jimeet Modi, Founder and CEO, SAMCO Securities and StockNote, said markets are waiting for the festive season to gauge how consumer spending pans out and whether there is a change in sentiments at the bottom of the pyramid.

Published on September 15, 2019
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