Indian shares are expected to open higher on Monday, tracking their Asian peers, although worries about domestic growth and its effect on the central bank’s monetary policy decision later this week are likely to keep gains in check.
The Gift Nifty futures were trading at 24,354, as of 07:54 a.m. IST, indicating that the benchmark Nifty 50 will open above its close of 24,131.1 in the previous session.
Asian markets gained on positive economic data from China, while Wall Street equities closed higher on Friday.
After slipping into correction territory last month, Indian shares have risen in the previous two weeks as cheaper valuations have attracted investors.
However, that could face a dampener after data released late on Friday showed India’s economic growth slowed much more than expected in the third quarter due to weaker expansions in manufacturing and consumption, likely adding pressure on the central bank to lower interest rates.
“While the slowdown in economic growth will weigh on sentiment, investors will be more inclined to act on the upcoming Reserve Bank of India’s monetary policy,” said Vinod Nair, head of research at Geojit Financial Services.
The RBI is expected to hold rates at its meeting on Dec. 6. But the rising probability of a rate cut after the subdued growth data could also lead to some buying interest from investors, especially in rate-sensitive sectors such as financials, auto, consumer and real estate, two analysts said.
Traders also anticipate interest in commodity-linked stocks after upbeat factory activity in top metals consumer China.
Reliance, pharma stocks lead Indian shares’ rebound to log weekly gains
Adani group stocks will be in focus after Gautam Adani, the conglomerate’s founder, said the group was committed to world-class regulatory compliance, responding to allegations by US authorities that he was part of a $265 million bribery scheme, allegations that the group has called “baseless”.
The indictment triggered a $34 billion fall in the group’s market value, but the stocks have recovered ground in the last few sessions.
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