All eyes to be on macro data in 1st week

For Indian equities, 2017 was a great year. Despite the disruptions witnessed due to note ban and GST, in the year it was one of the best performing markets.

Positive global market sentiment and robust domestic fund flows have supported markets even though there has been some deterioration in macro- economic indicators. Benchmark indices Sensex and Nifty ended 117 points and 38 points higher at 34,057 and 10,531 during the week ended.

For December, FIIs sold ` 6,411.57 crore worth of shares, while DIIs were net buyers worth ` 8,142.88 crore. It is pertinent to observe that 2017 will be the third successive year with domestic mutual fund flows into equities at $ 18 billion stronger than FPI inflows of $ 7.5 billion.

The benchmark indices posted yearly gains of over 28 per cent; Nifty Bank Index rose over 40 per cent and the mid- and small- cap indices outperformed, surging over 50 per cent.

To sustain the improvement in the World Bank’s ‘ ease of doing business’ Index and Moody’s upgrade of sovereign credit ratings one notch above investment grade ( Baa3 to Baa2), more structural reforms should be in place, say observers.

With Gujarat elections highlighting rural distress, coming Budget may focus on specific programs to revive investment and the rural economy.

Crude prices closed at their highest level in two and a half years on the final trading day of 2017. Rally from here onwards may spook the ongoing rally in stocks.

Near- term direction will be dictated by the parliament session, crude oil prices and macroeconomic data.