Investors eye macro data for next cues

Spooked by concerns over India’s economic slowdown, subdued Q3 corporate earnings projections, persistent FII sales on the back of weak rupee and mixed global markets; the domestic stock market indices posted their worst performance in more than two months, falling between 2.5-6 per cent. BSE Sensex lost 1,844.2 points, or 2.32 per cent, closing at 77,378.91, while the Nifty plunged 573.25 points, or 2.38 per cent, settling at 23,431.50. The BSE Mid-cap index declined 5.7 per cent, and the BSE Small-cap index fell by 6 per cent. Compounding the worries, crude oil price continued its uptrend during the week and any significant further increase can pose some challenge to the economy. Oil prices rallied nearly three per cent to their highest in three months. In the near term, macroeconomic data, such as India’s inflation rate and industrial production figures, will also play a crucial role in shaping market direction. On the global front, updates on the US economy, particularly labour market data and inflation trends, may impact FII flows. The Q3 earnings season will pick up pace in the week with Reliance Industries, Infosys, HCL Tech, Axis Bank, Tech Mahindra, LTIMindtree, Jio Financial among a host of companies due to report their quarterly results.

Market Musings: Analysts and market strategists love to predict what markets will do in the year ahead. Don’t let this misguided ritual blind you to what assets are really worth. Every December, market pundits predict what various assets will return over the coming year. Every January, the predictions begin to be proven wrong. You probably already know that this annual forecasting ritual is absurd. What you might not realize is that it’s also toxic. Even so, you can use it as inspiration to clarify how you think about your investments. How inaccurate are one-year market forecasts? They’re like a person looking in an unlit cavern at midnight for a black cat that isn’t there.

F&O/ SECTOR WATCH

Mirroring the broad-based weakness in the cash market, the derivatives segment witnessed aggressive shorting by ‘bears’. The continuous selling by FIIs in the cash segment, along with earnings worries the Indian market were enough ‘fuel’ for bears to initiate fresh shorts. Nifty shed almost two per cent on the weekly chart, whereas Bank Nifty lost around three

per cent.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)