Macroeconomic data points and global trends mainly from the US-China trade conflict would drive the equity markets in a holiday-shortened week ahead, analysts said.
Stock markets will be closed on Monday for ‘Ganesh Chaturthi’.
Official data released after market hours on Friday showed that India’s GDP growth slipped to an over six-year low of 5 per cent in the June quarter of 2019-20, hit by a sharp deceleration in manufacturing output and subdued farm sector activity.
“The continuation of the slowdown in GDP growth was expected but the 5 percent growth in Q1 is worse than expected...GDP growth figures will pick up in Q3 and Q4 benefitting from the low base of previous financial year.
“Also the rate cuts by the RBI will act strongly in Q3 and Q4 since monetary policy impacts with a lag of 2 to 3 quarters. We need structural reforms like labour and land market reforms to stimulate and sustain growth,” said V K Vijayakumar Chief Investment Strategist at Geojit Financial Services.
“The week ahead would be lackluster and there will be a dearth of triggers from the corporate side, therefore international triggers could be the driving factor,” said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote.
Meanwhile, the government on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth.
Deepak Jasani, Head of Retail Research, HDFC securities said, “The announcement of PSU bank consolidation is welcome and a good first step in sustainably turning around the PSU banks.”