Stock market this week: Nifty 50 started this week with a gap up opening on Monday and then consolidated within a range for most of the week. The index witnessed support near the previous breakout zone of 16400 to 16450 and due to the global markets rally we again witnessed a gap up on Friday. However, the index gave up the intraday gains on the last trading session and ended below 16,600 levels. Overall it was a good trading week for the bulls as markets witnessed positive momentum and a recovery was seen from the support zone of 16450-16400. However, the data turned bearish ahead of the last trading session where we saw FII’s unwinding their long positions in the index futures segment and forming some fresh shorts too.
However, stock market next week is expected to remain fully loaded with economic activities across globe. RBI Monetary Policy Committee (MPC) Meeting, European Central Bank’s meeting, US inflation data, etc. are going to dictate stock market movement in upcoming week.
Speaking on major triggers that may impact stock market in near term, Sreeram Ramdas, Vice President at Green Portfolio — a SEBI Registered Portfolio Management Service Provider said, “Several economic data prints are awaited the following week which will have a short-term impact on the markets. Mainly, we have instrumental data releases from the US markets followed by our RBI meeting decision.”
Here we list out top 5 triggers that may dictate stock market this week:
1] RBI MPC meeting: Manufacturing PMI data coming from China has been supportive for the markets. Even though the Chinese manufacturing witnessed a contraction, there was an element of recovery in the numbers, which the markets applauded. Any bottlenecks or surprise lockdowns can hurt this momentum.
“Manufacturing data – We are expecting a year-on-year growth of nearly 1% in India’s manufacturing output, any print north of this would highlight how the recovery in the manufacturing segment is prolonging without exhaustion. The RBI interest rate decision will be a defining moment for markets next week. Even though the markets have penciled in a 40-basis points hike, the focus will be on the statement post the repo rate decision. If the RBI’s primary focus has shifted from curbing inflation rather than promoting economic growth, we can witness further downside in equities and bonds alike,” said Sreeram Ramdas.
2] ECB meeting: On the macro front, we have the ECB meeting, which will be in the spotlight after the latest data has flagged concerns about inflation in the Eurozone, as it hit the highest level on record owing to rising energy costs. Central bank meetings from Australia & Russia would also be in focus during the coming week. Any shift in the dovish stance of policymakers could be a negative factor for the dollar index. Downside in dollar index is expected to put breaks on the FIIs selling in Indian markets.
3] European first quarter GDP data: “This will give more clear picture on the speculations of global slowdown. Any disappointing data may trigger sell-off across global equity markets including Dalal Street,” said Anuj Gupta, Vice President — Research at IIFL Securities.
4] US inflation data: As US inflation is a major concern for major central banks across globe. Stock market traders and investors are advised to keep an eye on the upcoming US inflation data this week. Any positive report may trigger fresh strength in the global stock markets.
5] Russia-Ukraine war: “With Russia now controlling nearly 20% of Ukrainian territory and most of the eastern regions, any ceasefire will certainly add to positive market sentiments and ease commodity prices. We have the Crude oil stock change data from the US being released next week. Pattern of severe drawdown in stock piles have been contributing to the sharp rise in Crude oil prices. Further continuing drawdown will add to rise in prices,” Sreeram Ramdas said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.