The domestic markets are likely to continue their downward movement, at least during the opening hours on Monday. Gift Nifty at 23,570 signals a flat to negative opening for Nifty, as Nifty futures on Friday closed at 23,614 on the NSE. Despite the Bharatiya Kanata Party’s emphatic win in New Delhi, analysts expect the market to take direction from global cues. According to them, the result season is almost over and with the RBI reducing the rate, all eyes will be on the real economy.
Manoj Purohit, Partner & Leader, FS Tax, Tax & Regulatory Services, BDO India, said “With sound and pathbreaking reforms to make the financial services sector robust, inclusive, and to enhance foreign participation, the government has laid the roadmap for ‘Viksit Bharat’. Though FPI inflows have still not turned fully green, last week’s Budget announcements, followed by the Central Bank’s policy release this week, has brought India back to the forefront among the fastest emerging economies of the world.’
Despite macro factors such as the fear of additional tariff and trade curbs proposed by the newly elected US government, rising inflation risk, currency depreciation, looming trade wars, India is well poised and self – insulated by strong measures and timely rate cut measures to boost domestic investments and consumption, keeping the market buoyancy live, he added.
The foreign investors’ fraternity is all set to take a plunge in the India market to get sound, effective net returns from a long-term perspective. The government, too, has echoed the sentiment by simplifying the tax regime, clarifying taxation anomalies, and extending several tax holidays by another 5 years in IFSC Gift City to keep the door open for them, according to him.
Puneet Singhania, Director, Master Trust Group, said: The outlook for the market will be guided by major domestic and global economic data such as India CPI (YoY) (Jan), India Industrial Production (YoY) (Dec), India WPI Inflation (YoY) (Jan), India Bank Loan Growth, India Deposit Growth, US CPI (Jan), US Core CPI (Jan), US Initial Jobless Claims, US PPI (MoM) (Jan), US Core PPI (Jan), US Industrial Production (Jan), US Retail Sales (Jan), UK GDP data, China CPI (MoM) (Jan). “For India, inflation and industrial output data will be released on February 12. Inflation for January is forecast at 4.69% YoY, lower than the previous 5.22%, which could impact RBI’s rate decisions in the meeting during April. India Industrial production for December is expected at 4.1% YoY, compared to 5.2%, signalling weak manufacturing momentum,” he added.