Thanks to encouraging global cues, the Indian stock market closed higher for the day in the previous session as well as for the week. The local stock market will continue to be dominated by news on global macroeconomics, crude oil movement, and FII flows after last week’s pullback bounce, which saw the Sensex and Nifty gain over 2.5%. On the domestic front, the monthly F&O expiry, fiscal deficit figures, auto sales data, monsoon development, and Covid cases will be important items to keep an eye on.
Here are five factors that will trigger traders on Dalal Street this week
FIIs have already withdrawn Rs 2.13 lakh crore from stocks in 2022 due to rising interest rates. The amount is getting close to the Rs 46,000 crore threshold in just one month. FIIs continue to be a major player in the Indian market, even though domestic investors have been absorbing the majority of the outflow by international investors.
Auto Sales Data
This week would be devoted to auto stocks as automakers begin reporting their June month sales statistics on June 1. The Nifty Auto index increased 6.95% last week as a result of declining material prices.
G7 Summit 2022
“The G7 Summit 2022 is slated for June 26–28, 2022, and any further escalation of geopolitical tension related to the wars in China-Vietnam and Russia-Ukraine might cause a major fall in the world equities markets. The G7 Summit is therefore urged to be watched closely by stock market investors, according to Anuj Gupta, vice president of research at IIFL Securities.
“Many triggers will determine the path for gold prices next week. The movement of the dollar index would be the first significant factor since it will determine FII participation in Indian markets. Following some easing last week, the dollar index made a strong comeback. “Any further gain in the dollar index may trigger a severe selloff by FIIs,” warned Gupta.
Crude oil had its second consecutive weekly loss last week amid concerns that rising interest rates could send the global economy into a recession. Brent crude’s final price per barrel was $113.12.
Any unanticipated big increase in oil production will aid in reducing oil prices and inflation. Even though oil prices are surging by triple digits, OPEC and its members are sticking to their original plan to add 432,000 barrels per day to the market. OPEC has not made any unexpected announcements.
US GDP Data
Next week, market watchers and investors need to be on the lookout for this crucial trigger. If the results are unsatisfactory, then concerns about a recession in the US economy will get stronger, which would cause a big drop in prices on international markets, including Dalal Street.
Nifty Technical Outlook
Technically, the Nifty created a bullish piercing line candlestick on the weekly chart after finding support at the 100-week SMA, indicating a pullback rise on the horizon, according to Santosh Meena, head of research at Swastika Investment Ltd. The immediate supply zone on the upswing is between 15,700 and 15,900; above this, we can anticipate a rebound towards 16,050 and 16,200. 15,500 should now serve as significant support on the downside.
“Banknifty is recovering from the crucial support level of 32,500; the area between 34,200 and 34,500 is an immediate resistance zone; above this, we may anticipate a rally toward the 35,200-35,500 zone. The drawback is that 33,000 should provide immediate help,” he continued.