Stock market trends this week will largely depend on developments over the GST Bill, movement of the rupee and uncertain global cues amid an expected rate cut by the US Fed, say experts.
Besides, October’s industrial production data, slated for after market hours on Friday, may fuel some speculation leading to volatility in stocks, they added.
“Investor nervousness is expected to continue until the US Fed decision with respect to its interest rate lift-off is through in mid-December,” said Hitesh Agarwal, head of research, Reliance Securities.
Weakness of the rupee is also a cause of worry for the FIIs, he said, adding that October’s index of industrial production (IIP) will be on market radar, which could add to the volatility.
“Amidst all this, in the wake of recent developments, a silver lining which is visible to market participants is the possible passage of the GST Bill in the Winter Session of Parliament, which will be a shot in the arm for the India growth story,” he said.
The rupee continued to decline against the American currency for the third consecutive day on Friday and touched a more than two-year low of 67.01 during the intra-day deals.
“Apart from GST bill, macroeconomic data, trend in global markets and movement of rupee against the dollar will dictate trend this week,” said Vijay Singhania, founder-director of Trade Smart Online.
In a recommendation that can break the political logjam over Goods and Services Tax, a panel headed by the chief economic advisor on Friday suggested 17-18 percent GST rate and dropping of the 1 percent additional tax on inter-state sales.
“Market will go into wait and watch mode prior to the US Fed meeting outcome causing the market to oscillate in a narrow range. FIIs are still on the bearish side of the market,” said Jimeet Modi, CEO of SAMCO Securities.
Fed chair Janet Yellen last week hinted at a rate hike, which is widely expected to lead to some outflow of foreign capital from local markets.
“Sentiments have also been affected with Chennai floods crippling several business,” said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas.
The BSE Sensex fell nearly 2 per cent at 25,638.11 and Nifty tanked below the key 7,800-mark during the past week.