The Nifty gained 3.6% last week, driven by two major events: the election results and the Reserve Bank of India’s (RBI) monetary policy update. When markets reopen on Monday, several important domestic and global events are expected to influence them.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, highlighted the importance of global factors like the US Federal Open Market Committee (FOMC) meeting and the rupee’s movement against the dollar, as well as crude oil and commodity prices. Additionally, investments by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will be closely watched.
Here are the key factors likely to impact the market this week:
1) Fed FOMC
The US Central Bank is not expected to cut rates during the FOMC meeting on June 11-12, but the market will pay attention to its commentary on inflation and the economy following the European Central Bank’s (ECB) recent rate cut.
2) US Markets
Major US indices ended in the red on Friday after strong non-farm payroll data reduced the likelihood of a rate cut. The Dow 30 fell by 87.18 points to 38,799, the S&P 500 dropped by 5.97 points to 5,346.99, and the Nasdaq Composite decreased by 39.99 points to 17,133.10. Indian markets will take cues from the Friday closing of US markets and the movement of GIFT Nifty futures on Monday.
3) Rupee Vs Dollar
The Indian rupee closed stronger on Friday at 83.3725 against the US dollar, boosted by dollar sales from local corporates and an uptick in most Asian currencies. The rupee gained 0.1% week-on-week. Despite earlier pressure due to election results, likely interventions by the RBI helped stabilize the currency. Experts predict the rupee will stay within the 83.00 to 83.50 range.
4) Corporate Action
Key corporate actions this week include:
- June 10: Ex-date and record date for Nelco and Dr. Lal Path Labs dividends; ex-date and record date for a 3:1 bonus share of Motilal Oswal Financial Services.
- June 11: Ex-date and record date for dividends of Tata Motors and Asian Paints.
- June 12: Ex-date and record date for the dividend of Tata Chemicals.
5) Technical Factors
Technical charts indicate that the Nifty is maintaining an upward trend. Arvinder Singh Nanda, Senior Vice President at Master Capital Services, suggests that the index will likely stay within the 22,600 to 23,400 range, with 22800-23000 as short-term support and 23400-23500 as resistance. For Bank Nifty, key support levels are at 49,000 and 48,500, with resistance between 50,200 and 50,600.
6) FII / DII Action
On Friday, foreign institutional investors (FIIs) were net buyers of Indian equities, purchasing shares worth ₹4,391.02 crore, while domestic institutional investors (DIIs) were net sellers at ₹1,289.75 crore. The actions of these investors will influence market movements.
7) IPO Action
Next week, Le Travenues Technology, which operates the travel platform Ixigo, will launch its IPO. Additionally, there will be four listings, including Kronox Labs.
8) Crude Oil
Oil prices, which impact inflation and interest rates, softened on Friday. Brent crude futures settled at $79.620 per barrel, down $0.40, and US WTI settled at $75.380 per barrel, down $0.17.
9) Bond Yields
Indian government bond yields remained stable on Friday after the RBI kept its policy rate and stance unchanged. The benchmark 10-year yield ended at 7.0168%. Policymakers voting for a rate cut of 25 bps and a change in stance from “withdrawal of accommodation” to “neutral” indicate the possibility of lower interest rates in the future.
10) Global Macros
Besides the FOMC, the market will watch US core CPI data and crude oil inventory reports. The UK will announce its April GDP, industrial production, and manufacturing numbers. Germany will release its CPI data, and the Eurozone will announce its industrial production figures.
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