CAD & auto data to be key drivers of stock market this week

Current account deficit (CAD) in June and monthly sales of auto and cement firms will be the main drivers of the stock market , which will be closed on October 2, this week. After gloom and euphoria, markets are back to normal and in the consolidation phase with a downward bias.

The excitement shown by foreign institutional investors (FIIs) has died down as well with their net purchase Rs 604 crore last week. Domestic institutions sold shares worth Rs 369 crore.

Besides, global developments like US debt ceiling imbroglio and the European Central Bank's interest rate decision could also be tracked closely by investors. The October 2 holiday could see a change in trend. Trade figures for August and June CAD data would be declared on Monday. Auto and cement companies will declare their results on Tuesday.

The Dow Jones was weak on Friday closing with a weekly loss of 1.25 per cent at 15,258 points.

Key levels for this week will be 19,350 and 20,100 on the Sensex and 5,730 and 5,960 on the Nifty. Markets are likely to remain subdued at the start and may rally towards the end of the week on some valuebuying or clarity on the political front.

The National Spot Exchange Ltd crisis seems to be going from bad to worse with Union finance minister P. Chidambaram has virtually washed his hands of the issue.

The government continues to dither on diesel prices and it is now clear that there is no way the budgeted figures on subsidy and fiscal deficit can be maintained.

(The writer is an investment analyst)   

As appeared in Mail Today