Border tension, inflation data & FII flows among 8 key factors to guide markets this week

NEW DELHI: A 10 per cent drop in US tech stocks jolted the Indian stock market bulls this week but a spectacular performance by Reliance Industries thanks to a number of deals in the offing kept the market upbeat.

In the coming week, inflation data will be critical as it will make a base for RBI to decide on further rate cuts. If the inflation continues to remain high, RBI will not have much wiggle room to ease its policy further.

Movements in the US markets and progress in talks between India and China over border tensions will also be key as any negative news on both fronts will not be taken well by investors on Dalal Street.

“Among the major triggers, participants will first react to the IIP numbers next week, followed by the CPI and WPI inflation data in the coming sessions. Besides, further updates on disengagement between India and China at LAC would also remain on their radar. Meanwhile, markets will continue to take cues from the global indices and upcoming FOMC meet,” said Ajit Mishra, VP – Research, Religare Broking.

Here are key factors that may guide markets this week:

Border tensions: China told Indian interlocutors in Moscow last week that it is willing to discuss reduction of forces at the Ladakh frontier. However, it is believed the Chinese took the line that this process should be undertaken simultaneously by both sides, wherein lies the catch.

Progress or lack of it will be closely tracked by the market participants.

Global cues: Indian markets have been closely tracking movements in the US markets. On Friday, the Dow Jones Industrial Average rose 0.48%, to 27,665.64 while the S&P 500 closed flat. The tech heavy Nasdaq Composite dropped 0.6%.

The market will keep an eye on developments on the policy front as well as there has been

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