Stock Market Outlook after Lower GDP Growth Rate: India’s GDP growth rate has registered a growth of just 5.4% in the July-September quarter, the weakest in the last two years. This decline can become a matter of concern for the market. Although there was a rise of 1% in Sensex and Nifty on Friday, but these weak GDP figures may have an impact on the market movement on Monday, because the latest GDP figures have come out after the market closed on Friday.
GDP figures came after Friday’s rise
On Friday, the last trading day of the week, the Sensex closed at 79,802.79 with a gain of 759 points, while the Nifty remained at the level of 24,131.10. Sectors like auto, pharma, and telecom played a major role in this boom. Buying in shares like Reliance Industries and Bharti Airtel strengthened the market. But this rise was seen before the weak GDP growth rate figures were released. In such a situation, the question is, what will be the sentiment when the market reopens on Monday?
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Impact of decline in GDP growth rate
Market experts believe that weak GDP data may have a negative impact on investor sentiments. Vinod Nair, head of research, Geojit Financial Services, says, “Despite the decline in GDP and weak corporate earnings, the market had already discounted this data. “However, this weakness may put pressure on the market in the coming weeks.”
The GDP growth rate of 5.4% in the September quarter is much weaker than the growth rate of 6.7% in the previous quarter. Therefore, market sentiment may become weak. Analysts believe that the focus of investors will now be on the upcoming monetary policy of the Reserve Bank of India (RBI). Kunal Kundu, economist at Societe Generale, said, “If there are signs of reduction in inflation, an interest rate cut is possible in February 2025. But there is no possibility of any change in the December policy.”
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Concern about international factors
Indian markets can also be affected by international markets. Investors will also keep an eye on China’s manufacturing PMI data and the inflation rates of Europe and America. Harry Chambers, assistant economist at Capital Economics, says, “Amidst uncertainty around the world, investors will also focus on domestic economic data. “Consumer expenditure may continue to decline due to the double whammy of decline in GDP growth and high interest rates.”
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Possible market movement on Monday
The market may remain under pressure on Monday due to weak GDP data. However, the market may get support from banking and auto sectors. Experts believe that the direction of the market will depend on the activities of foreign institutional investors (FIIs) and domestic indicators. HDFC Bank Chief Economist Sakshi Gupta said, “GDP data can destabilize the market. But there is hope of improvement in the second half due to the festive season and increase in government spending.”
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Will keep an eye on these upcoming figures
Upcoming economic data will play an important role in the stability of the market. PMI data of services and manufacturing, auto sales figures and international crude oil prices will also influence investors’ decisions. Radhika Rao, senior economist at DBS Bank, believes that “this quarter could be the lowest point of economic recession. Government spending and strong Kharif crop will further support the market.” In such a situation, there are full chances of instability in the market movements on Monday.
