Markets may remain volatile; IIP, inflation, rupee key: Experts
New Delhi: Macroeconomic data such as industrial production, movement of rupee and foreign fund investment trends will be key triggers for stock markets this week and indices are likely to see volatile trade, say experts.
"Indian markets are expected to stay volatile amid fresh risks to FIIs inflows thrown up by weakening rupee. Inflation and IIP data will also be crucial for markets as they set the tone of Reserve Bank of India's policy review on June 17," said Vikas Jain, Founder, Aditya Trading Solutions.
The industrial output data for April will be announced on Wednesday and on the same day inflation based on consumer price index for May will be declared.
Wholesale price index inflation for May will come out on Friday.
These data would be key ahead of the Reserve Bank of India's policy review on June 17 for near-term direction.
Ahead of its mid-quarter policy this month, RBI said its monetary actions in the coming months will be determined by the "monsoon outlook" and ensuing impact on inflation.
"Market trend has turned bearish in the near-term. RBI's monetary policy in mid-June and inflation and IIP numbers shall be key triggers for market direction," Rakesh Goyal, Senior Vice President, Bonanza Portfolio said.
Besides, the rupee had on Friday closed below the key 57-mark against US dollar for the first time in a year sliding by 22 paise to 57.06, casting a shadow on the economy as imports become costlier, current account deficit (CAD) woes worsen and inflation risks rise.
A weak rupee makes imports costlier, including oil and other commodities. It also affects dollar-denominated liabilities of corporates. However, export-oriented sectors like IT are expected to benefit from a weak rupee.
"Going ahead, monsoon, economic data and RBI policy will be the domestic factors to watch out for," said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
In the stock market, the BSE benchmark index Sensex fell by 1.67 percent to end the week at 19,429.23.