Indian stock market closed higher for the day in the previous session and for the week aided by positive global cues. After last week’s pullback rally that saw Sensex and Nifty gaining over 2.5 per cent, the domestic stock market will continue to be dominated by news related to global macros, crude oil movement and FII flows. On the domestic side, key events to watch out for would be the monthly F&O expiry, fiscal deficit numbers, auto sales data, progress of monsoon and Covid cases.
Here are five factors that will trigger traders on Dalal Street this week
FII Selling
Amid rising interest rates, FIIs have withdrawn Rs 2.13 lakh crore from equities so far in 2022. This month alone, the figure is nearing the Rs 46,000 crore mark. Although domestic investors have been absorbing most of the outflow by foreign investors, FIIs remain a key player in the Indian market.
Auto Sales Data
Auto stocks would be in focus this week as automakers will start reporting their June month sale figures from June 1. Last week, the Nifty Auto index had rallied 6.95 per cent on the back of softening commodity prices.
G7 Summit 2022
“G7 Summit 2022 is scheduled from 26th to 28th June 2022 and any further escalation of geopolitical tension in regard to Russia-Ukraine war and China-Vietnam may lead to sharp correction in global equity markets. So, stock market investors are advised to keep an eye on the G7 Summit next week,” said Anuj Gupta, Vice President — Research at IIFL Securities.
Dollar index
“Next week, a lot of triggers will dictate the trend for gold prices. The first major variable will be the movement of the dollar index as it would decided FIIs’ activity in the Indian markets. Dollar index rebounded strongly after some ease last week and any further rise in dollar index may lead to sharp selling by FIIs,” said Gupta.
Crude Oil
Amid worries that rising interest rates could push the world economy into recession, crude oil posted the second weekly decline last week. Brent crude settled at $113.12 a barrel.
OPEC+ Meeting
Any unexpected significant oil output boost will help ease oil prices and inflation. Nonetheless, OPEC and its members are adhering to their initial plan to add 432,000 barrels per day to the market, and no surprise announcements have been made by OPEC despite oil prices surfing at triple digits.
US GDP Data
This is an important trigger that market observers and investors need to remain vigilant about next week. If the numbers are disappointing, then speculations for slowdown in the US economy will get further strength leading to sharp selling in global markets including Dalal Street.
Nifty Technical Outlook
Santosh Meena, head of research, Swastika Investmart Ltd. said: “Technically, the Nifty formed a bullish piercing line candlestick on the weekly chart after taking support at 100-week SMA which indicates a pullback rally on the card. On the upside, 15,700-15,900 is an immediate supply zone; above this, we can expect a rally towards the 16,050/16,200 level. On the downside, 15,500 should act as strong support now.”
“Banknifty is bouncing back from the key support of 32,500 where 34,200-34,500 is an immediate resistance zone; above this, we can expect a rally towards the 35,200-35,500 zone. On the downside, 33,000 should act as immediate support,” he added.
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