Markets this week: Markets closed in a flat tone last week after selling in banking, consumer durables, metals, IT and auto stocks. Market The previous session ended higher for the third straight week led by positive global cues. On the domestic front, favorable updates on the progress of monsoon further boosted the sentiment. After a strong start to the week, the benchmark remained in a range till the end but maintained a positive tone, driven by healthy buying in select key indices across sectors. As a result, nifty The index closed at 16,584, up 1.4 percent. The broader indices also saw a good hold, with both midcap and smallcap rising 1.3 per cent and 4.4 per cent respectively.
Ajit Mishra, VP – Research, Religare Broking Ltd. said: “With earnings season behind us, the focus will be on the upcoming MPC’s monetary policy review meeting, which is scheduled during June 6-8. Citing stable inflation Markets have already taken another hike in prices, however commentary will be focused amid updates on favorable monsoon.Besides, performance of global markets and volatility in crude oil will also be looked into. On the macroeconomic front, The eyes of the participants will be on the IIP data on June 10.
RBI meeting
The Monetary Policy Committee meeting of the Reserve Bank of India will be held next week on June 8 with the expected outcome. Markets are again preparing for a volatile week with the RBI keeping policy major spotlight in view of deteriorating inflation situation. Experts are predicting a rate hike between 25 basis points to 50 basis points by the RBI following the trend of US Fed. Also, the responses of banks to their lending and deposits amidst changes in RBI’s policy repo rate will also be looked into.
ECB meeting
Apart from the Reserve Bank of India, the European Central Bank is also set to meet next week on June 9 with the expected outcome. The ECB recently suggested that there was a need to move faster on raising interest rates after eurozone inflation touched and surpassed multi-year highs. Eight percentage points in May.
crude oil prices
The focus will be on the price of black gold next week as the recent surge in the price of the commodity had investors worried on the inflation trajectory. Global Brent futures touched a high of $123 a barrel during the past week amid fresh sanctions imposed by the European Union on Russia. The Organization of the Petroleum Exporting Countries (OPEC) decided to increase oil production to ease supply pressure, as prices cooled at the end of the week.
macro economic data
Several key economic data points will also be on investors’ radar next week. The Street will look to China’s inflation data for May for signs of an economic revival as cities like Shanghai ease lockdowns. In addition, India’s industrial production data for April will also be released at the end of next week. In addition, global markets will keep an eye on the balance of trade data in China and the US inflation print for May.
FII Sailing
Selling pressure from Foreign Institutional Investors (FIIs) will continue to dominate the investor psyche as the group remained a net seller of Indian equities for another week. Last week, FIIs were net sellers of Rs 3,417 crore, taking their total for the year to Rs 1.8 lakh crore. Their sales momentum slowed down significantly last week, giving hopes that the group may soon become a net buyer in the market.
Nifty Technical Outlook
nifty 50 index failed to hold above its 50-day moving average of 16,870 on Friday and closed the day below that crucial level. “A long downside candle was formed after opening higher on the daily chart. Technically, this pattern indicates the formation of a counter attack of a bear type candle pattern (not a classical one) at higher levels. But the formation of such a pattern amidst range movement can avoid any sharp downside so far,” said Nagraj Shetty, Technical Research Analyst, HDFC Securities.
However, Shetty said that the market is still bullish in the near term and there is no sign of any reversal as of now. Support for the index is likely to be near 16,350-16,400 while 16,800 points remain a major resistance.
What should investors do?
Mishra said: “The market is witnessing a rebound since last 3 weeks but the move lacks decisiveness due to challenges like global tightness due to inflation, geopolitical tensions etc. We feel Nifty above 16,900. Will gain some strength though a break below 16,400 will bring bears back into play. Meanwhile, participants should focus on sector/stock selection as markets are providing opportunities on both sides but avoid going overboard.
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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