Markets likely to focus on monsoon, Q4 GDP, May auto sales data

Auto stocks will be keenly watched as companies will release monthly sales data for May. Photo: Hemant Mishra/Mint

Mumbai: The arrival of monsoon, macro data and May auto sales data are likely to be in focus in the week ahead. As the markets touched record highs last week, analysts say onset of monsoon rains will be key for the rally to continue.

The India Meteorological Department (IMD) said on Sunday southwest monsoon may hit parts of south Arabian Sea and south Kerala on 30-31 May. The monsoon hit the Nicobar Islands and the entire south Andaman Sea on 15 May.

“We continue to believe that Indian markets are likely to do well going ahead owing to the strong monsoon, reforms, low interest rates and strong consumption trends. While global economy remains in good shape, at the current juncture, we believe that domestic factors life GST, affordable housing, etc. are weighing more than the global factors,” said Vaibhav Agrawal, head of research and ARQ, Angel Broking.

Almost at the end of reporting corporate earnings, few companies like Bharat Petroleum Corp. Ltd, Coal India Ltd, NTPC Ltd, Larsen & Toubro Ltd, Power Finance Corp. Ltd, Power Grid Corp. of India Ltd, Hindalco Industries Ltd and Mahindra & Mahindra Ltd will announce Q4 results this week.

Auto stocks will be keenly watched as companies will release monthly sales data for May. Last month, passenger vehicles sales jumped 14.68% in year-ago period according to industry lobby group Society of Indian Automobile Manufacturers (Siam). Passenger vehicle sales grew to 277,000 units in April from 242,000 units in the year-ago period. Growth in sales of utility vehicles slowed to 13.71% to 70,691 units in the same month.

Investors will also watch out government-run oil marketing companies on regular fuel price revision toward the end of the month.

Gross domestic product (GDP) data for January-March quarter will be released on 31 May. In third quarter, India’s GDP had slowed down to 7% from 7.4% in Q2. Recently, the United Nations revised India’s economic growth forecast for 2017. It said India is projected to achieve a 7.3% growth in 2017, a downward revision from the 7.7% forecast for the year due to concerns on stressed balance sheets in banking sector which may hamper investments cycle.

Manufacturing Purchasing Managers’ Index (PMI) data for May will be announced on 1 June. Manufacturing PMI in India was at 52.5 in April 2017.

In the primary market, PSP Projects will be listed on exchanges on 29 May. The issue, which was oversubscribed 8.58 times with a price band of Rs205-210 per share, was open for subscription from 17-19 May.

Nasrin Sultana