Sensex Week Ahead: Fed meet, Gujarat elections, Winter Session key events to track

NEW DELHI: The bulls on Dalal Street made a stunning comeback during the last two sessions, thus saving the Nifty50 index from drowning below the 10,000 level, which looked imminent, given the quantum of downsides. Lack of any fresh trigger, no news from the RBI in its fifth bimonthly monetary policy meet of FY17-18 and jitters ahead of Gujarat elections spooked investors during the period.

However, opinion polls indicating the BJP's win provided the much-needed relief, which saw benchmark indices recover most of the losses, and close at respectable levels.

On Friday, the BSE Sensex rallied 300 points to settle at 33,250 while the Nifty50 index of NSE gained nearly 100 points to end at 10,265.65 with 38 out of 50 constituents ending in the green.

Looking forward, the upcoming week promises to be a full of action as a host of events are lined up one after another. Here's a look at them in detail:

All eyes on Gujarat elections: Investors will closely watch all the developments related to the Gujarat elections. The first phase of the poll for 89 constituencies concluded on Saturday. The second phase of polling will take place on December 14, 2017 in 93 assembly constituencies. The verdict will come out on December 18, 2017.

FOMC meet: The US Federal Reserve's Federal Open Market Committee (FOMC) will start its two-day rate-setting meeting on Tuesday, December 12, 2017, with the decision due next day. The bank, in all probability, is expected to hike interest rates. If the Fed acts as expected, it will be the third rate rise this year as the central bank moves away from its policy of keeping rates close to zero that it imposed after the recession. Going by the buzz, the chances of a 25 basis point rate rise — taking the top of its target range to 1.5 per cent — are almost at 100 per cent.

Factory output numbers: On the macro front, the IIP data for October will be released on December 12, 2017 (Tuesday). India's industrial production growth slowed in September from a nine-month high in August. Output, as measured by the Index of Industrial Production (IIP), rose 3.8% in September, compared with an upward revised 4.5% in August.

Inflation data: The government will release inflation data based on consumer price index (CPI) for November on Tuesday, December 12, 2017. Consumer prices increased 3.58 per cent YoY in October, above 3.28 per cent in September. WPI inflation will also be announced on December 14, 2017 (Thursday). Wholesale prices rose 3.59% year-on-year in October, following a 2.60% increase in September.

ECB, Bank of England meet: Europe’s top two - the ECB and Bank of England - are scheduled to hold their final monetary policy meetings of the year on Thursday, though it’s highly unlikely either will rock the boat policy-wise, says Reuters. The ECB held its benchmark refinancing rate at 0% on 26 October, as widely expected, and decided to reduce its quantitative easing programme to a monthly pace of 30 billion euros from January with the option of extending it in September 2018.

Tech charts signal resistance above 10,300
The Nifty50 on Friday rallied around 1 per cent and signed off the week with a 'Hammer' formation on the weekly charts. Experts believe that the index can make an attempt to move above the 10,300 level in the short run, but see resistance thereafter. Mazhar Mohammad, Chief Strategist – Technical Research; Trading Advisory at Chartviewindia.in said given the strength in the market, the next logical target appears to be in the 10,332-10,345, which is the gap down area registered on November 30. "The index is expected to witness some sort of selling pressure in this zone. Hence, we advise traders to book profits in the said zone on signs of weakness."

Winter Session of Parliament:The Winter Session of Parliament will commence on December 15 and continue till January 5, with 14 sittings of both Houses during the 21-day period. The proceedings will be keenly watched and market will take cue from the related developments.

US jobs data: The US jobs market added an impressive 2,28,000 jobs in November as the unemployment rate remained at a 17-year low of 4.1%. Economists had been expecting the US to add 200,000 new jobs during the month. The news is likely to ensure that the Federal Reserve will vote to raise interest rates when it meets next week. "The fairly upbeat report underscored the economy’s strength and could fuel criticism of efforts by Trump and his fellow Republicans in the US Congress to slash the corporate income tax rate to 20 per cent from 35 per cent," Reuters said in a report. The numbers are likely to impact stocks across the globe, including India.

Astron Papers IPO opens on Dec 15: Astron Paper and Board Mill will launch its initial public offering (IPO) on December 15. The price band of the offer has been fixed between Rs 45 and Rs 50 per equity share. The IPO comprises an offering up to 1,40,00,000 equity shares of face value of Rs 10 each of the company. Astron Paper & Board Mill is manufacturer of Kraft Paper. It has manufacturing facilities in Halvad, Gujarat. The issue closes on December 20.

Stocks in focus: Shares of India's largest steel producer SAIL is likely be on investors' radar as the company is set to approve a long-proposed $1 billion joint venture with ArcelorMittal at its board meeting next week, Reuters reported. The decision to approve the deal was reached after talks between ArcelorMittal’s billionaire Chairman Lakshmi Mittal, India’s Steel Secretary Aruna Sharma and SAIL Chairman PK Singh at a meeting last week in New Delhi. This apart, shares of Max Group companies such as Max India are expected to see some downsides after Delhi government cancelled license of Max Hospital, Shalimar Bagh over newborn's death.