Rising geopolitical tensions, Union Cabinet reshuffle, weak macroeconomics data are going to move the equity market in the coming week.
Although the domestic equity market absorbed socks form heavy downpour in Mumbai, Infosys saga.
Between August 24 and September 1, the Sensex gained 0.9 per cent while the broader Nifty added 1.19 percent. On Friday the benchmark Index, BSE Sensex surged 162 points to settle the session at 31,892 while the Nifty 50 closed at 9,974.
US-North Korea Tension
North Korea on Sunday claimed that it successfully tested a hydrogen bomb which can be loaded into a new intercontinental ballistic missile, reported The Guardian.
Quoting South Korean authorities, the British Newspaper reported that the test was about 11 times stronger than North Korea's test in January last year and up to six times stronger than its test last September.
US national security adviser HR McMaster spoke with his counterpart, Chung Eui-yong in Seoul, for 20 minutes in an emergency phone call, following the news of the test, the daily reported.
In response to its latest missile launch on 29 August, US President Donald Trump said that all options were on the table to deal with North Korea.
The Indian market suffered as tension between two nations escalated recently. Early in August, the Nifty 50 index tanked nearly 4 percent or around 400 points to 9,737 in 7 trading sessions.
Cabinet Reshuffle
In the Cabinet rejig on Sunday morning, nine ministers have been inducted into Prime Minister Narendra Modi's Council of Ministers, along with four Minister of States getting promoted to Cabinet rank.
Piyush Goyal, Nirmala Sitharaman, Dharmendra Pradhan and Mukhtar Abbas Naqvi have been elevated to the Cabinet. Sitharaman, who was previouly the minister of state for Commerce and Industry, is the new Defence Minster and Piyush Goyal the Railways minister. Goyal retains the Coal portfolio.
The government described the motto of the Cabinet reshuffle as Power of 4Ps: Passion + Proficiency + Political Acumen – for Progress, reported the Economic Times.
Recently, the peformance of Modi government performance had come under criticism from various quarters. A series of rail derailments, Gorakhpur hospital tragedy, Baba Ram Rahim conviction and the riots following it and the failure of demonetisation, provided fodder for critics.
The political developments in the country and the cabinet reshuffle is likely to have an impact on capital market.
#CabinetReshuffle: Here are the newly inducted Ministers who took oath just now, as Ministers of State pic.twitter.com/5IHqIweqhL
— PIB India (@PIB_India) September 3, 2017
Macroeconomics
Earlier on Wednesday, RBI in its annual report revealed that 98.96 percent — or Rs 15.28 lakh crore out of the Rs 15.44 lakh crore — of the invalid currency notes had come back into the banking system by the end of June 2017.
The Modi government's game changing economic policy, demonetisation squeezed the economy slowed down the GDP growth from 7% in October-December quarter to 6.1% in January-March and 5.7% in April-June.
The data released on Thursday last week, Central Statistical Organisation showed that India's "real" or inflation-adjusted GDP grew was at its slowest pace in 13 quarters and is still a long way off from returning to an 8 percent growth path, last seen in 2015-16.
The GDP data revealed that India is grew just 5.7 percent in the April-June quarter of fiscal 2018, amid slowdown in the manufacturing sector, which expanded at 1.2 percent from a year earlier compared with a 10.7 percent growth last year.
