Global cues, rupee movement to dictate market trend

New Delhi :With the end of the first quarter earning season, stock markets will look at global events, monsoon rains, movement of rupee and investment trend by overseas investors for further cues, say experts.

Stock markets may see positive momentum going ahead amid hopes of a rate cut based on healthy macroeconomic data.

“July WPI contracted for ninth straight month and cooling of CPI inflation has fuelled the rate cut expectations that RBI Governor may cut rates before its policy in September,” said Gaurav Jain, Director, Hem Securities.

Deflationary trends continued for the ninth month in a row in July with wholesale inflation plunging to a historic low of (-)4.05 per cent.

The WPI number follows retail inflation (CPI) data, which had slipped to a record low of 3.78 per cent in July.

“Global clues will continue to dominate market sentiments. All eyes will be on Greece ahead of debt repayment deadline of Thursday,” said Vikas Singhania, Executive Director, Trade Smart Online.

“Any further move from China to devalue Yuan will spark fears of a global currency war. The movement of rupee against the dollar and crude oil price movement will also dictate trend on the bourses in the near term,” he added.

Progress on reforms is important for India’s economic recovery, an expert said.

“Movement of index in near-term will depend on further reform initiatives to be taken by the government,” said Vivek Gupta, CMT Director Research, CapitalVia Global Research.

Due to disruptions, the government could not get the GST Constitution Amendment Bill passed in the Monsoon session of Parliament which ended on Thursday.

Over the past week, the Sensex fell by 169 points to 28,067.31.