RBI policy outcome, macro data, FII inflows among key factors that will guide markets next week

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It turned out to be a disappointing week of trade for the domestic equity benchmarks with frontline gauges snapping five weeks winning streak, as traders remained concerned over China’s Evergrande Group’s debt crisis and widening power shortage in China. Key gauges made muted start to the week as traders got anxious with RBI’s data showing that the country’s foreign exchange reserves declined by $1.47 billion to $639.642 billion in the week ended on September 17. Traders also remain concerned with the report stating that as many as 470 infrastructure projects, each worth Rs 150 crore or more have been hit by cost overruns totalling more than Rs 4.37 lakh crore. The BSE Sensex slipped 1282.89 points or 2.14% to 58,765.58 for the week ended October 01, 2021. The Nifty slipped 321.15 or 1.80% to 17,532.05. Here are key factors that will steer the market next week:

RBI Policy Outcome

The Reserve Bank of India’s (RBI) monetary policy committee (MPC) will announce its interest rate decision on Friday, 8 October 2021.

Crude oil, rupee movement, FII inflows

Trends in global markets, the movement of rupee against the dollar and crude oil prices, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will be watched.

Covid updates

On the coronavirus front, investors would continuously watch out government’s course of action along with progress on the vaccination drive. Besides, as new Covid cases have seen a considerable decline, all eyes would be on state governments for further easing of the restrictions. Globally, the trend of rise in Covid cases on account of the delta variant, especially in UK and Asia.

Macroeconomic data

On the macro front, Markit Services PMI for September will be declared on 5 October 2021.

Global cues

Overseas, markets in mainland China are closed for the Golden Week holiday from Friday, 1 October 2021 till 7 October 2021. The China Caixin Services PMI for September on 8 October 2021.

In the near term, investors will keep an eye on Washington as Congress passed a bill that would fund the government through early December. The bill would avert a government shutdown but Congress still has not raised the debt ceiling, which Treasury Secretary Janet Yellen says will be reached on October 18.

Yellen and Fed Chair Jerome Powell testified before the House Financial Services Committee on Thursday. Yellen reiterated her call for Congress to raise the debt ceiling, saying that failure to do so would be catastrophic.

The US Non-Farm Payrolls data for September will be announced on 8 October 2021.

(With inputs from Capital Market – Live News)