India Week Ahead: Q1 GDP data, RBI board meet, more reforms

Shiv Gupta

The markets closed in the green after 3 straight sessions of losses. Nifty settled above 10,800 level; 200 points off day’s low. Nifty Bank index closed marginally below 27,000 level; 400 points off day’s low. Sensex closed at 36,701 points and Nifty at 10,829 points on Friday.

For the week Nifty slipped 2%, Sensex fell 1.8%, Bank Nifty closed down 4.5%,
Maruti 4.6%, TCS 3.8%, Tech Mahindra 3.6%, Infosys 3.6%, Sun Pharma 3.6% and HCL 3% were among Nifty gainers. Yes Bank -25%, Indiabulls Housing Finance -15%, IndusInd Bank -9%, Tata Motors -8.6%, Ultratech -8.1% were among Nifty losers.

The markets rallied post on news of Finance Ministry announcing measures to boost the economy on Friday evening post-market hours, Finance Minister Nirmala Sitharaman announced a slew of measures to boost investors confidence - announced a rollback of surcharge on FPIs - the super-rich tax. Upfront payment of Rs 70,000 Cr for a recap of PSU banks. The biggest for corporates was making any violation of CSR norms a civil liability and not a criminal offense.

The market is expected to open gap up on Monday and a broad base rally seen said Saurabh Mukherjea of Marcellus Investment Managers.

Here is a look at some of the events, which will guide the markets this week.

Hope of more reforms
FM Sitharaman addressing the media said that the measures announced on Friday was the first part of the booster, more measures will be announced next week. Shares of real estate companies will be in focus was FM is expected to announce some measures for ailing real estate sector.

Rally in PSU banks, auto stocks
A rally in public sector banks and the auto sector is expected as FM announced the upfront payment of Rs 70,000 Cr for PSU banks. FM announced the purchase of BS-4 vehicles will be allowed as is till March 2020, also deferred hike in vehicle registration fee till June 2020

RBI board meet
Sources tell BTVI, RBI board may take up Jalan panel report at the forthcoming meeting on Monday, the panel recommends transfer of reserves in tranches and an incremental transfer of Rs 30,000 cr as a one-time possible scenario.

Trade war
The trade war between US and China escalated on Friday with President Trump announcing a new set of higher tariffs. The U.S. said existing 25% tariffs on some $250 bn in imports from China would rise to 30% with effect from October 1. The Chinese government vowed to fight back against trade tariffs. The global market will react negatively to the development.

India's growth data for the April-June quarter will be released on Friday, ICRA
expects Q1 GDP at 6%, GVA at 5.7%. The Power Secretary and Former DEA Secy SC Garg said that first-quarter GDP is likely to be between 5.5% to 6%. This is on account of subdued government expenditure on account of elections and some reduction in demand.