The domestic markets this week, starting May 30, will mostly be guided by macroeconomic data announcements, besides, global trends amid ongoing concerns over high inflation, several analysts. After witnessing a series of volatile sessions last week, the 50 stocks index Nifty consolidated within a broad range of 15,900 to 16,400 during the week, but it recovered from the lows on the expiry day and continued the momentum on the last trading session.
The Indian stock markets’ key indices, Sensex and Nifty, rallied by more than one per cent on Friday, led by strong buying support in IT, banking and capital goods stocks. The 30 stock S&P BSE Sensex surged 632.13 points or 1.17 per cent to close at 54,884.66 points against its previous day’s close at 54,252.53 points. The broader Nifty 50 of the National Stock Exchange closed 182.30 points or 1.13 per cent higher at 16,352.45 points against its previous session’s close at 16,170.15 points.
Speaking on the factors that may impact Dalal Street movement next week, Anuj Gupta, vice president — Research at IIFL Securities said, “Pull-back in last session of the market should be seen as relief rally and one needs to remain vigilant about the major triggers like dollar index movement, European Central Bank on interest rate hike, Indian GDP data, Chinese manufacturing data and US non-farm payrolls and employment data, etc.”
India’s GDP
India will report its gross domestic product (GDP) data for the March quarter on Tuesday. A Reuters poll showed that the country’s economic growth likely slowed for the third consecutive quarter as demand remains a concern amid rising fuel and food costs. Economists polled by Reuters expect the March quarter GDP to grow at a paltry four per cent from the year-ago quarter reflecting the impact of the third wave of the pandemic and Russia-Ukraine war.
Rupee
After seven consecutive weeks of weakness, the domestic currency finally strengthened against the US dollar aided by a general decline in the US dollar index against a basket of 10 major currencies. The rupee ended the week at 77.59 to the US dollar after hitting a low of 77.78 during the period. Market participants expect the currency to remain rangebound as the Reserve Bank of India will likely continue to provide intermittent support.
Chinese Manufacturing Data
This will be a major event that a market investor can’t afford to miss out. “China is in a deflationary phase and cutting rates. This has led to a massive decline in their currency and as a result, major global hedge funds are dumping Chinese stocks. This affects all emerging markets and India is no different. A close watch and perhaps even monitoring needs to be done on this event as it is bound to drive market conditions,” Sonam Srivastava, Founder at Wright Research.
Earnings
The March quarter earnings season enters its home stretch as more than 300 companies will report their results including some prominent ones like Sun Pharmaceutical Industries, Life Insurance Corporation of India, Jubilant Foods, Delhivery, and Dixon Technologies.
Other famous names that will be announcing their results include Dilip Buildcon, Dish TV, Dhani Services, Equitas Holdings, Nureca, Reliance Communications, TTK Prestige, and Vikas EcoTech.
US Employment Data
This release is expected on Friday next week. In case of disappointing numbers, there can be sharp selling across global markets as speculations about slowdown in the US economy may get a boost from such weak numbers.
Nifty Technical Outlook
On the technical front, the Nifty index continues to remain in oversold zones in short term which indicates a mild reversal from here is possible. Major developed and emerging market indexes are also indicating near-term bottom formations, the analyst at Samco Securities said.
Traders should maintain a bullish bias with a hard stop loss below 15,700 levels and a convincing break above 16,400 can result in a retest of the 16,800-16,900 levels on the upside, she added.
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