New Delhi, Sept 6: The domestic equity market will bring its focus back on developments around India-China tensions and updates related to the COVID-19 pandemic this week, with a slew of key macro data released over the past week suggesting a long road to recovery, according to analysts.
Last week, the BSE benchmark Sensex fell 2.81 per cent or 1,110 points, and the NSE gauge Nifty dropped 2.7 per cent or 314 points as investors turned cautious on weaker-than-expected GDP number and infrastructure output data.
"Going ahead, the market is likely to remain in a consolidative mode in the near term with more sector/stock specific actions and intermittent profit-booking cannot be ruled out. The market would now be looking forward to positive signs of economic recovery and would track development around the US stimulus announcement," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said.
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As the situation in eastern Ladakh remains tense, Defence Minister Rajnath Singh has conveyed to his Chinese counterpart Wei Fenghe that China must strictly respect the Line of Actual Control (LAC) and not make attempts to unilaterally change its status quo.
In the first highest-level face-to-face contact between the two sides after border tension erupted in eastern Ladakh in early May, Singh and Wei met for over two hours in Moscow last week on the sidelines of a meeting of the defence ministers of the Shanghai Cooperation Organisation(SCO).
Vinod Nair, Head of Research at Geojit Financial Services, said, "Uncertainties await the market this week, be it global economic data points or geo-political uncertainties related to Indo-China border tensions."
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Markets seem to have lost its momentum in the near-term and could be heading into a round of consolidation, Nair observed.
Meanwhile, on the COVID-19 front, India's tally of cases went past 41 lakh with a record of 90,632 people being infected in a day, according to the Union Health Ministry data. The death toll climbed to 70,626 with the novel coronavirus virus claiming 1,065 lives in a span of 24 hours in the country.
According to the analysts, market sentiment will also be guided by trends in the forex market and Brent crude movement.
