Investor attention will be focused on industrial output and retail inflation numbers to be released early this week, while the Ayodhya verdict may have a positive impact on sentiment, market watchers said.
The Sensex last week closed at record highs in three sessions and the Nifty reclaimed the 12000-mark.
The 30-share Sensex had, however, ended lower 330 points on Friday after Moody’s cut India’s credit outlook to negative from stable. During the week, the Sensex had gained 158.58 points, or 0.39 per cent, while the Nifty rose 17.55 points, or 0.14 per cent.
In a landmark verdict on Saturday, the Supreme Court cleared the way for the construction of a Ram temple at the disputed site at Ayodhya, and directed the Centre to allot an alternative five-acre plot for a mosque.
Market circles said that while the Moody’s action had been discounted, the Supreme Court judgment may lead to a positive reaction on the bourses. “It (the judgment) ends decades of uncertainty. While one has to see whether the development will impact stock prices on Monday, it will have a positive fallout,” Arun Kejriwal, director, KRIS, an investment advisory firm, told The Telegraph.
Despite the economy passing through a slowdown, the stock markets have followed a different path in recent times on expectations that the worst may be over and more reform measures from the government are in the offing. Better-than-expected corporate results have also contributed to the rally.
The IIP data for September will be released on Monday, while the retail inflation numbers will be out the following day. Industrial output had contracted 1.1 per cent in August, while retail inflation in September had inched up to 3.99 per cent, close to the medium-term target of four per cent set by the RBI.
“The trend of the market (for next week) will be dictated by macro releases. India’s CPI inflation is expected to be on the higher side at 4.3 per cent due to a rise in vegetable prices as per consensus estimates,” said Vinod Nair, head of research, at Geojit Financial Services, said.
“Despite the festive season, IIP is expected to decline to 2.3 per cent as per estimates. Both the data released is expected to put pressure on rate sensitive stocks. However, global concerns related to trade war have eased and could provide comfort to investors,” he said.
