OUTLOOK | All eyes on GDP growth, industrial and mfg data;  investors anxious about India-US BTA negotiation bottlenecks 

FPJ News Service MUMBAI

Markets will be predominantly driven by updates on the proposed India-US bilateral trade deal this week. The key focus will be on the negotiation bottlenecks, if any.   “Investors will remain cautious amid potential rekindling of trade war. If President Trump continues his ‘classic bullying tactic’ on tariffs, markets will crash.

The recent recovery was triggered by Trump’s tilt towards deal-making, and de-escalation with a few trading partners, such as UK and China,” market gurus at Dalal Street, said. Markets will also monitor FII fund flows, domestic macroeconomic data (GDP, industrial and manufacturing output), progress of monsoon, corporate earnings, and developments in the US bond market.

“The mkt experienced heightened volatility last week, largely due to the turbulence in the global bond markets. The US government’s directive for American companies to halt the use of China-made AI chips—particularly those from Huawei Technologies—has escalated tensions.

Despite heavy FII selling over the past few days, the Indian market showed resilience, reflecting continued confidence in India’s long-term growth prospects. Expectations of a normal monsoon, which is favorable for agricultural productivity, combined with declining crude oil prices, are likely to keep inflationary pressures subdued. 

“A softer inflation outlook provides the RBI with greater flexibility to maintain its accommodative monetary policy stance, paving the way for interest rate cuts to support economic growth. Mkts will be watching the upcoming Indian GDP figures, along with US growth data, inflation and jobless claims, to gauge the strength of economic recovery both domestically and globally,” said Vinod Nair, head of research at Geojit Investments.