Nifty ended with 0.4% gains in a week-long holiday shortened by Bakri Eid. When markets resume trading on Monday, a host of important domestic and global events lined up during the holiday-truncated week are likely to impact them.
“The Indian stock markets exhibited positive trends as the Sensex and Nifty indices both posted minor gains, marking their third consecutive week of growth. The Nifty Bank index, in particular, stood out with its largest weekly gain of 2024, surging by more than 3%. This impressive performance also signifies the Nifty Bank’s longest winning streak in 19 months, as it recorded gains for the sixth straight week,” Pravesh Gour, Senior Technical Analyst at Swastika Investmart said.
In his view, the market is expected to trade sideways this week due to the absence of strong buying or selling triggers, even though the underlying sentiment remains bullish. He also sees dips attracting opportunistic buying, which could support the market.
Factors that are likely to impact movement when markets reopen this week:
GST Council meeting outcome
Fertliser stocks could be in action this week following GST Council’s recommendations sent to the Group of Ministers (GoM) for exempting it from the current 5% Goods and Services Tax (GST) levy.
In the 53rd meeting of the GST Council, which was chaired by Union Finance Minister Nirmala Sitharaman, the committee discussed the recommendations made by the Standing Committee on Chemicals and Fertilisers in February to reduce GST on nutrients and raw materials in the interest of fertiliser manufacturing companies and farmers. The development was informed by Andhra Pradesh Finance Minister P Keshav.
Online gaming stocks could also react on Monday after industry’s hopes of a review of 28% GST were dashed. According to reports, the FM confirmed that the issue was not discussed during the meeting.
US Markets
Major indices on Wall Street ended weak on Friday for the second straight session, dragged by technology stocks. While the Dow 30 settled at 39,150.30, up by 15.57 or 0.04%, the S&P 500 closed at 5,464.62, lower by 8.55 points or 0.16%. The Nasdaq Composite finished at 17,689.40, down by 32.23 points or 0.18%.
When Indian markets reopen on Monday, they will take cues from the Friday closing of the US markets. They will also track movement in GIFT Nifty futures on Monday. The latter is an early indicator of movement in the Nifty50.
Rupee Vs Dollar
The rupee appreciated 4 paise to 83.57 against the US dollar on Friday, backed by recent foreign capital inflows and stable crude oil prices in international markets. The local unit, however, faced resistance due to a strengthening American currency and subdued sentiment in the domestic equity markets, forex traders said. On Thursday, the rupee had plunged 17 paise to hit its over two-month low level of 83.61 against the dollar. The domestic currency recorded its previous lowest closing level of 83.61 on April 16 this year
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee appreciated due to favourable macroeconomic data and reports of intervention by the Reserve Bank of India (RBI). “However, weak domestic markets and a strong US dollar capped sharp gains.
“…FII inflows and any further intervention by RBI may support the rupee at lower levels. Traders may take cues from PMI and existing home sales data from the US. USD-INR spot price is expected to trade in a range of Rs 83.20 to Rs 84,” Choudhary added.
4) Corporate Action
June 24, Monday will be the ex-date and record date for Oberoi Realty; June 25 will be ex-date for AGM/dividend or Cera Sanitaryware and AGM for Dodla Dairy; June 26 will be the record date for Cera’s dividend; June 26 will be ex-date and record date for rights issue of SEPC;
AGMs of JSW Holdings, Tata Elxsi Alkyl Amines, Voltas, Welspun Living and Indian Overseas Bank (IOB) will hold their AGMs this week for dividends and other purposes.
5) Technical Factors
The outlook for the market will be guided by the major domestic and global economic data, Arvinder Singh Nanda, Senior Vice President, of Master Capital Services said. Daily chart analysis indicates that Nifty has been consolidating within a broad range of 23,400 to 23,700, and this trend is likely to continue, he added as he sees no significant triggers for aggressive buying or selling at present.
As for Bank Nifty, the banking gauge continued its bullish continuation last week, closing the session above the critical 51,500 level, where substantial call-side open interest has accumulated, Nanda said. “To confirm an upward trend towards the 53,000 level, the index must decisively break the 52,200 mark. Support is firmly established in the 50,500-49,900 zone, and a break below this range could trigger further downside movement towards 49,000,” this analyst added.
6) FII / DII Action
On Friday, the Indian headline indices ended in the red, breaking their six-session gaining streak dragged by sell-off by the foreign institutional investors (FIIs). They were net sellers at Rs 1,790.19. As for the domestic institutional investors (DIIs), they ended-up buying shares amounting to Rs 1,237.21 crore.
The performance of domestic and foreign investors will have an impact on the way movement happens in the domestic stock markets.
Also Read: FPIs turn net buyers of Indian equities at Rs 12,170 crore in June so far after two months of selling
7) IPO Action
The primary market continues to thrive post the election with as many as 9 public offers set to be launched next week. Among these, the IPOs of Allied Blenders and Vraj Iron and Steel will open in the mainboard segment. In the SME segment, a total of seven issues will open for subscription next week.
Apart from the new IPOs, the Street will see 11 listings, including that of Stanley Lifestyles, DEE Development Engineers and Akme Fintrade.
Also Read: IPO Calendar: Primary market to see 9 new issues and 11 listings next week in post-election boom
8) Crude Oil
Oil prices remain critical for markets with their impact on inflation and on the rate trajectory of global central banks including India’s.
Crude oil prices held near a seven-week high on Friday as the market balanced signs of improving US demand and falling oil and fuel inventories versus a stronger US dollar.
The Brent crude futures on Comex settled at $85.240 a barrel, losing $0.69, or 0.81% while the US WTI contract settled at $80.590 a barrel, falling $0.70 or 0.86%.
On MCX, the April crude oil contract settled at Rs 6750, up by Rs 4 or 0.06%.
9) Bond Yields
Indian government bond yields ended marginally lower for the week, tracking US treasuries, while purchases by foreign investors and banks aided sentiment ahead of a crucial week where Indian bonds will be included in JPMorgan’s emerging market debt index. India’s benchmark 10-year yield ended at 6.9723%, following its previous close of 6.9781%. The yield fell 1 basis point (bp) this week.
“Favourable macroeconomic conditions domestically, continuous buying from foreign investors and lower U.S. yields are supportive even as the currency hit a record low and oil prices rose this week,” said VRC Reddy, treasury head at Karur Vysya Bank.
10) Global Macros
Among the important events lined-up next week, Fed Governor Christopher J. Waller and FOMC member Mary C Daly’s will speak; May home sales data and and April’s house price index data will also be released.
In the UK, the Bank of England’s financial stability report will be published along with the release of FPC Meeting Minutes. In the Eurozone, Consumer Inflation Expectation and Consumer Confidence data for June will be released.
In China, YTD industrial profit data will be released along with FDI numbers.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
