Key macro-economic data to drive the equity markets (Market Outlook)

Mumbai, May 8  Key macro-economic data, combined with quarterly earnings' results and the progress in parliament, are expected to flare-up volatility in the Indian equity markets during the upcoming week.

"In the coming week the market may remain volatile as macro-economic data, global markets and the movement of crude oil prices will dictate trends in the near term," said Vaibhav Agarwal, vice president and research head at Angel Broking.

Key domestic macro-economic data such as the consumer price index (CPI) and IIP (index of industrial production) are slated to be released next week.

Besides, global macro-economic data on US retail sales and consumer sentiment, along with inflation figure from China and Eurozone GDP will influence the equity markets.

According to Anand James, chief market strategist, Geojit BNP Paribas Financial Services, the equity markets' tone for the next week will be set by the Bank of Japan (BoJ), which is expected to release its March meeting minutes on Monday.

James elaborated that the dismal US non-farm payroll figures have fuelled talk about a possible recession and reduced the potential for a June rate hike.

"In this backdrop the possibilities of a RBI (Reserve Bank of India) rate cut would be played up, especially with IIP and CPI data scheduled for release on May 12," James said.

The US data for last month showed that the economy created 160,000 jobs, against 215,000 in March.

Devendra Nevgi, chief executive of ZyFin Advisors said that the parliament session closing May 13 would be closely followed next week.

"The parliament session would be closely watched on the reforms and action on bills, some of which will need the upper house nod," Nevgi said.

Further, market observers pointed out that the next batch of fourth quarter (Q4) results will also guide the equity markets.

"Investors will closely track the next batch of Q4 results," Agarwal added.

Sector-wise, Pankaj Sharma, head of equities for Equirus Securities said that IT stocks will be influenced by Cognizant's results which were declared on Friday.

"The performance and guidance is a bit disappointing from one of the largest IT companies which has similar model as other large cap Indian IT names," Sharma said.

"And, this doesn't inspire a lot of confidence on how this year would look like on growth for the Indian IT sector."

The equity markets closed the previous week in the red, as negative global cues, along with disappointing Q4 results and profit booking, dented the equity markets.

During the week ended May 6, the wider 51-scrip Nifty of the National Stock Exchange (NSE) slipped by 116.35 points or 1.48 percent to 7,733.45 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE declined by 378.12 points or 1.47 percent to 25,228.50 points.