What will drive the market in next 15 days?
Analyzing the Macros & the Micros for you!
Here’s a detailed analysis of crucial economic data points that shall matter the most in the coming days-
1. RBI Interest Rate Decision- 30 Sep, 10 am
2. Bond Inclusion Update (JPM Bond/Bloomberg/FTSE bond index reviews) - 30 Sep - 17 Oct
3. GST Collection/Auto Sales/Bank’s Quarterly Updates - 1 to 4 Oct
4. Nikkei S&P Manufacturing PMI- 3 Oct,10:30 am
5.Nikkei S&P Services PMI- 6 Oct, 10:30am
6. Earning Season kickstart- TCS results - 8 Oct, 7 pm
RBI Interest Rate Decision
The RBI has raised the short-term lending rate (repo) by 140 basis points (bps) since May, & it may again go for a 50-bps increase to take it to a three-year high of 5.9 %
RBI controls of liquidity in the system & has the dual motive of managing inflation & supporting growth in the economy.
Analysis
Description- Rate hike
Impact on Equity- Negative
Whether the rate hike priced in- Yes
Watch out for - Commentary & outlook going-forward
Bond Inclusion Update
India has long been waiting to get included in the bond indices, namely 3 (JPM GBI-EM Global Diversified Index, Bloomberg Global Aggregate Index, and FTSE WGBI Index).
Bond inclusion will force passive fund managers (who invest according to the weights given by the above-mentioned indices) to invest in Indian bonds which shall go a long way in supporting the rupee and improving the balance of payments for India.
Analysis
Description- Indian Bond Inclusion
Impact on Equity- Positive
Whether the inclusion is priced in- Some extent
Watch out for - Possible $20 billion inflows in case of a positive outcome.
GST Collection/Auto Sales/Bank’s Quarterly Updates
GST e-way bill generation data of last month has set the tone for a substantial collection figure. In the case of auto sales, there still exists a significant order backlog & festive demand for 4-wheeler cars.
On the banks front, small private banks are expected to perform better compared to large banks on the growth front as it usually tends to happen in a robust credit growth environment.
Analysis
Description- Key data points of last month
Impact on Equity- Depends
Whether good outcomes priced in- Some extent
Watch out for - Individual stocks’ impact in banks & autos
S&P Nikkei PMI Manufacturing data (Aug)
PMI stands for Purchasing Managers Index, where a read above 50 refers to expansion in the manufacturing sector, & a read below that refers to a compression. A better-than-expected number is positive for our domestic currency (INR) & the equity markets, as it showcases the strength of the economy & vice versa.
Analysis
Description- PMI Manufacturing datapoint
Expected read - 55.8 (forecast)
Impact on Equity- Depends
Whether good outcomes priced in- Can't say
S&P Nikkei PMI Services data (Aug)
PMI stands for Purchasing Managers Index, where a read above 50 refers to expansion in the service sector, & a read below that refers to a compression. A better-than-expected number is positive for our domestic currency (INR) & the equity markets, as it showcases the strength of the economy & vice versa.
Analysis
Description- PMI Manufacturing datapoint
Expected read - 57 (forecast)
Impact on Equity- Depends
Whether good outcomes priced in- Can't say
Earning Season kickstart- TCS results - 8 Oct, 7 pm
As usual, the first big company to come out with its results for Q2 FY23, TCS, will be keenly looked at. In a recessionary environment in developed markets, it shall be interesting to note what changes companies like TCS make in their guidance.
Analysis
Description- Kickstart to earning season (Q2 FY23)
Impact on Equity- Depends
Whether good outcomes priced in- Can't say
Watch out for - IT stocks, followed by the rest of the market.