GDP data, F&O expiry among top factors that will guide market this week

The government is scheduled to release GDP print for December quarter of financial year 2018-19 (FY19) on Thursday. The February 2019 futures & options (F&O) contracts will expire on the same day.

After falling for nine straight days, the S&P BSE Sensex regained some lost ground in the second half of the week gone-by. The Nifty50 index, too, followed suit. On a weekly basis, the Sensex ended 0.17 per cent higher, while the broader Nifty50 index settled 0.62 per cent up.

Going ahead, with the earnings season drawing to a close, the focus will now shift to macros and general elections, whose dates are expected to be announced this week.

"Global as well domestic factors have a higher probability of driving the Indian bourses going ahead, but uncertainty will prevail given the political scenario in the country. Market participants are eagerly waiting for the announcement of election dates the next week. Profit booking can be witnessed in certain counters such as DHFL, Canfin Homes, Indiabulls Housing Finance as they have recorded smart gains post deep corrections," said Jimeet Modi, Founder & CEO at SAMCO Securities & StockNote.

"The government’s move to infuse Rs 48,239 crore in 12 PSU banks will keep the banking sector afloat, but on the whole, markets will continue to remain tepid," Modi added.

Here’s a look at the top factors that market may react to this week –

GDP numbers: The government is scheduled to release gross domestic product (GDP) print for December quarter of financial year 2018-19 (FY19) on Thursday. According to World Bank, India's GDP is expected to grow at 7.3 per cent in the fiscal year 2018-19, and 7.5 per cent in the following two years. In the previous quarter (July-September), the GDP growth slowed to three-quarter low of 7.1 per cent.

Other macros: Besides GDP data, the government is also slated to unveil fiscal deficit data, eight core industries and manufacturing PMI data for February this week. India's budgetary fiscal deficit for the April-December period stood at Rs 7.01 lakh crore or 112.4 per cent of the budgeted target of Rs 6.24 lakh crore.

F&O expiry: The February 2019 futures & options (F&O) contracts will expire on Thursday, 28 February. Equities may witness volatility as traders will roll over positions in the F&O segment from the near month February 2019 series to March 2019 series. 

US-China trade truce: In the latest development, US President Donald Trump said on Sunday he would delay an increase in US tariffs on Chinese goods thanks to “productive” trade talks and that he and Chinese President Xi Jinping would meet to seal a deal, if progress continued, Reuters reported.

Trump had planned to raise tariffs to 25 per cent from 10 per cent on $200 billion worth of Chinese imports if a deal between the two economies were not reached by Friday (March 1).

Other global events: Trump-Kim Jong-un meeting, developments around Brexit deal and US Federal Reserve Chairman Jerome Powell and Michael Cohen testimony before Congress are the other key developments that investors will keep an eye on.

Stock-specific action

Jet Airways:  The crisis-hit airline said late on Friday that its shareholders approved a plan to convert existing debt to equity, paving the way for its lenders to infuse funds and nominate directors to its board.

Realty stocks: The GST Council on Sunday slashed the GST rates on under-construction residential properties to 5 per cent without input tax credit (ITC), from the existing 12 per cent.

“The slash in GST rates to 5 per cent without ITC from the previous 12% with ITC for premium homes, and to 1% minus ITC for affordable homes from the earlier 8 per cent, gives the beleaguered realty sector the much-needed breathing room and will certainly help it maintain some forward momentum in 2019,” said Anuj Puri, Chairman – ANAROCK Property Consultants.

Auto stocks: Shares of auto companies may hog the limelight as the companies will start releasing their sales figures for February from March 1.

Moreover, crude oil prices, FII inflows, movement of rupee against the US dollar and last leg of corporate earnings will also play a key role.