Global, local cues to guide stocks

Indian market would open factoring in positive news on US-China trade talks progress, very weak industrial production data that sunk to almost seven-year low in August at minus 1.1 per cent, World Bank projecting GDP growth at 6 per cent in current fiscal against 6.9 per cent in FY18-19 and forthcoming domestic macro economic data related to inflation.

The US has reportedly reached a partial trade agreement with China that would shelve a planned increase in tariffs on goods imported from China, while Beijing would increase purchases of US agricultural products. However, global cues remain mixed with tensions brewing in the Middle East.

“Global risk sentiment has improved this week due to constructive USChina trade talks but investors are likely to remain skeptical due to stress in the domestic lending sector. Oil prices jumped nearly 2.5 per cent after reports said that an Iranian oil tanker was struck by two missiles near Saudi Arabia,” according to IFA Global Treasury Research.

Post market hours on Friday industrial production data released by Central Statistics Office showed Industrial output slipped to -1.1 per cent monthon-month in August from 4.3 per cent in July.

The market would also start factoring in the outcome of assembly elections next week in Maharashtra and Haryana on October 21 with counting of votes scheduled on October 24.

Amid news of a partial trade deal, the rupee is likely to open stronger on Monday, IFA Global said. On the macro front, domestic consumer price index (CPI) data is due today that would have a bearing on interest rate sensitive sectors.

Market sentiment is also likely to improve on account of foreign portfolio investors’ selling coming down substantially in September-October 2019 period by Rs 2,500 crore only compared to more than Rs 28,000 crore selling in JulyAugust 2019 period and they turned net buyers on Friday by Rs 749.74 crore.

The earnings season worries however would remain with results to be declared by Reliance Industries, ACC, Wipro, SBI Life, ICICI General Insurance, TVS Motor, Federal Bank, DHFL and, Mindtree among others.

Infosys and Dmart promoter Avenue Supermarts positive earnings announcement may impact on the other stocks in the sector. Avenue Supermarts’ earnings declared on Saturday showed standalone Q2 revenue went up by 22.1 per cent at Rs 5,949 crore and standalone profit after tax went up by 47.7 per cent at Rs. 333 crore.

IRCTC will make its debut on the bourses on Monday. Its IPO was subscribed 112 times.