Inflation & IIP prints, trade deal & other global cues to steer Dalal Street this week

Plenty of events and factors are likely to keep the market busy next week. They include a new listing, some crucial bills in Parliament, a couple of important macro data and global cues.

The government will release November inflation print amid soaring vegetable and food prices, while factory output data for October will be released a little later in the week, which is likely to be subdued, as core sector output has remained disappointing.

The winter session of Parliament will come to an end this week. A number of important bills are slated to be tabled in the last week of the session.

Going by the buzz on Dalal Street, here are the key factors that will guide the market through the week:-

Retail inflation data
The government will release the Consumer Price Index (CPI) data for November on December 12, Thursday. India's retail price inflation climbed 4.62 percent year-on-year (YoY) in October, 2019, the highest in over a year, from the previous month’s 3.99 per cent and above market expectations of 4.25 per cent. The rise in inflation was the main reason behind RBI’s decision to maintain status quo on repo rate in the recently-concluded policy review.

Oct factory output
Market men will track industrial production outcome as the IIP data for October will be released on December 12. Industrial output in India dropped 4.3 per cent year-on-year in September of 2019, following an upwardly revised 1.4 per cent fall in August. Core sector output, which accounts for 40 per cent of the IIP data, fell 5 per cent year on year.

Winter session of Parliament
Dalal Street will keenly track a number bills that are going to be tabled in the ongoing winter session of Parliament, which commenced on November 18 and is set to end on December 13. They include the Personal Data Protection Bill that has the potential to affect the Internet companies on how they process data on Indian citizens.

Ujjivan SFB listing
Ujjivan Small Finance Bank is likely to finalise share allotment on Monday. The company may debut on BSE and NSE on Thursday, according to brokerages. The issue was subscribed 166 times during the book building process, and going by the recent trends, may see a bumper listing.

US-China trade deal
Traders will also track developments on trade deal between the US and China. On Friday, a US official said that a partial trade pact with China remains close at hand, days before another round of US tariffs is due to take effect. “The deal is still close,” National Economic Council Director Larry Kudlow told CNBC. “It is probably a wee bit closer than when I first made that statement in November.” He described the talks underway with Beijing as "intense," adding that they occur almost daily.

Meanwhile, US President Donald Trump lashed out at the World Bank on Friday, blaming the international financial institution for lending money to China.

Global cues to watch
On the global front, investors will be eyeing a slew of economic data from the US, starting from Consumer Inflation Expectations on December 9, followed by NFIB Business Optimism Index and Redbook on December 10, Core Inflation Rate, Inflation Rate and EIA Gasoline Stocks Change on December 11, Fed Interest Rate Decision, FOMC Economic Projections and Jobless Claims on December 12 and finally Retail Sales, Import Prices, Export Prices and Baker Hughes Oil Rig Count on December 13.

Technical outlook
On Friday, Nifty50 formed a bearish candle on the daily chart as it broke below its immediate resistance in the 11,950-60 zone with ease, suggesting that a short-term correction might have set in. Shrikant Chouhan, Senior Vice-President for Equity Technical Research at Kotak Securities, suggests caution and reducing weak long positions. He said the market fell largely on the back of a sudden rally in the 10-year GSEC, which closed higher at 6.65 on Friday. This triggered weakness in financials and other rate sensitive sectors.

“Also, the breadth of the broader market has turned poor too. Advances vs Declines stood at 1:3, which means the market has made a top at 12160 and is heading lower to levels of 11,700/11,600 in the near term. Traders and short term investors need to be cautious and should try to reduce weak long positions at 11950 and 12000 levels,” he said.