GDP, PMI data to guide stock markets this week

New Delhi: Domestic equities this week will be guided by GDP and PMI numbers even as Standard & Poor's rating action may set the initial tone for the stock market, say experts.

"Domestic fundamentals are better and a positive upgrade in rating by S&P could have provided further conviction to the sentiment of foreign investors. Given a fail in the rating upgrade, INR could have a subdued opening this week, impacting the performance of equity market in the near-term," said Vinod Nair, Head of Research, Geojit Financial Services.

Standard & Poor's on Friday kept its sovereign rating for India unchanged at 'BBB-minus' with 'stable' outlook. 'BBB' rating is a notch above junk status.

Sanjeev Sanyal, Principal Economic Adviser, termed the rating unchanged as "a bit unfair" saying the low per capita income is "neither a reflection on our ability or our willingness to pay debt".

"After the markets closed on Friday, S&P retained the rating of India. This is a small setback. Had a rating upgrade come, it would have been better. There could be a small setback on Monday, but that did not alter the course of the markets, which is headed higher," said VK Sharma, Head Private Client Group & Capital Market Strategy, HDFC Securities.

Stock market will also take cues from GDP and PMI (Purchasing Managers' Index) data for the manufacturing sector scheduled later this week.

"With temperatures falling and elections being hotly contested, market will take a pause and rest for a while before taking any meaningful direction. There are so many important events that the market is waiting to react, from state elections to RBI's MPC meeting, US FED year end meeting for interest rates etc," said Jimeet Modi, Founder & CEO of Samco Securities.

"Going ahead, we believe any easing in oil prices and reduction in inflation would help in extending the ongoing market rally.

"Election outcome in the PM's home state of Gujarat is another important trigger as a weak showing in this state would be perceived as loss in his popularity and therefore could be read as a sign of slackening in NDA's prospects in the 2019 elections," said Sanjeev Zarbade, Vice-president- PCG Research, Kotak Securities.

Over the last week, the Sensex jumped 336.44 points, or 1 per cent, while the Nifty rallied 106.10 points, or 1.03 per cent.

"Eyes will be glued majorly on GDP data," said Mustafa Nadeem, CEO, Epic Research.