Scholarship this week: Nifty 50 started this week with a gap opening on Monday, then consolidated in a range for most of the week. The index saw support near the previous breakout area of 16400-16450 and due to the rally in global markets, we saw an upward gap again on Friday. However, the index gave up intraday gains in the last trading session and finished below the 16,600 levels. 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 FIIs unwind their long positions in the index futures segment and also form new short positions.
However, the stock market next week is expected to remain fully charged with economic activity across the globe. RBI Monetary Policy Committee (MPC) meeting, European Central Bank meeting, US inflation data, etc. will dictate the movement of the stock market over the coming week.
Speaking on the main triggers likely to impact the stock market in the near term, Sreeram Ramdas, Vice President of Green Portfolio – a SEBI registered portfolio management service provider, said: “Several impressions of data economic data are due the following week which will have a short term impact on the markets.Primarily we have instrumental data releases from the US markets followed by our RBI meeting decision.
Here we list the top 5 triggers that could dictate the stock market this week:
1]RBI MPC meeting: Manufacturing PMI data from China supported the markets. Even though China’s manufacturing industry contracted, there was an element of recovery in the numbers, which the markets applauded. Any bottleneck or surprise lockout can hurt that momentum.
“Manufacturing data – We expect annual growth of nearly 1% in India’s manufacturing output, any impression north of this would highlight how the recovery in the manufacturing segment is continuing without exhaustion. RBI’s interest rate decision will be a defining moment for markets next week.Even though markets have forecast a 40bp hike, the focus will be on the statement after the repo rate decision If the primary focus of the RBI has shifted from fighting inflation to promoting economic growth, we may see a further decline in stocks and bonds,” Sreeram Ramdas said.
2]ECB meeting: On the macroeconomic front, we have the ECB meeting, which will be in the spotlight after the latest data signaled concerns over inflation in the eurozone, as it hit an all-time high in due to rising energy costs. Central bank meetings in Australia and Russia would also be a focus in the coming week. Any change in the dovish stance of policy makers could be a negative factor for the dollar index. The decline in the dollar index is expected to dampen FII sales in Indian markets.
3]European Q1 GDP data: “It will give a clearer picture of speculation on the global slowdown. Any disappointing data may trigger a sell-off in global equity markets, including Dalal Street,” said Anuj Gupta, vice president of research at IIFL Securities.
4]US inflation data: As US inflation is a major concern for major central banks around the world. Stock traders and investors are urged to keep an eye out for upcoming US inflation data this week. Any positive report can spark new vigor in global equity markets.
5]Russia-Ukraine War: “With Russia now controlling almost 20% of Ukrainian territory and most eastern regions, any ceasefire will certainly boost positive market sentiment and reduce commodity prices. We have the data on the U.S. Crude Oil Inventory Developments to be released next week. A sharp drop in inventories has contributed to the sharp rise in crude oil prices. A further continued decline will add to the price upside,” Sreeram Ramdas said. .
Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.