Dalal Street Week Ahead: India Q3 GDP, Feb auto sales among factors that will drive markets this week

Most sectoral indices traded in sync with the benchmark, with BSE Sensex tumbling 1,538.64 points or 2.52 per cent last week. This was the biggest weekly fall in the last eight months, as the investor sentiment was pressurised by weak global cues.

Sensex dipped over 1,500 points to settle at 59,464, while the Nifty50 lost 478 points to close at 17,466 during the week. This was the lowest closing level since 17 October, 2022, erasing out all previous three-week’s gains.

“Even though there are no clear visible positive triggers for the market now, a mild reversal is possible, going forward, culminating in positive returns in March,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Stock markets in the week ahead would take cues from global trends, the announcement of India’s Q3FY23 GDP numbers, auto sales data for February month, monthly manufacturing and services PMI numbers globally.

Let’s break down the key events that will drive markets this week:

1) Q3 GDP

India’s economic growth likely slowed to 4.7% in the December quarter from 6.3% in the preceding three months, as per a Mint poll. The GDP number, scheduled to be released on 28 February, will be a key factor to decide on how emerging-market growth held up in the final stretch of 2022.

“India’s Q3FY23 GDP growth, scheduled to be released next week, is anticipated to moderate from 6.3% in the preceding quarter,” said Vinod Nair, Head of Research at Geojit Financial services.

“In the near term, we expect market to consolidate in the absence of any fresh trigger. However, stock specific action could be seen. Next week investors will take cues from macro data including GDP and PMI numbers that would be released,” said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd. 

2) Auto sales in February

Tata Motors, Ashok Leyland, Maruti Suzuki, TVS Motor, Bajaj Auto, Hero MotoCorp, Escorts, M&M, and Eicher Motors are among auto stocks that will be in focus in the week ahead as all automobile firms will release their monthly numbers from 1 March.

“Auto sector stocks would be in focus on the back of monthly sales data to be announced next week,” Khemka said.

3) Global economy

– Fresh data from the euro zone will likely highlight why European Central Bank officials are hanging onto their hawkish tone. The reading, scheduled for Thursday, will remain significantly above the ECB’s 2% target.

– Beyond the euro zone, Switzerland, Sweden and Denmark are among nations publishing fourth-quarter GDP, and data from the UK will provide more evidence that the housing market is undergoing a correction.

– Turkish data is expected to show the economy grew about 5.2% last year, a figure which is being closely watched as elections draw near.

– Traders will closely watch the results and impact of Nigeria’s election after Saturday’s voting. The country has contended with widespread shortages of both gasoline and naira notes, leading to chaotic scenes at gas stations and banks.

– China’s PMI surveys will give a read on how the recovery is progressing in February, with Bloomberg Economics anticipating good news.

– Brazilian GDP figures and December employment data will likely show the economy lost momentum in the fourth quarter, Bloomberg Economics believe.

– Mexico’s central bank is expected to release a quarterly inflation report that offers its latest economic forecasts and clues on the path of monetary policy ahead.