Sensex, Nifty: F&O expiry, India’s external debt, US GDP growth to guide Dalal Street this week
After a dismal week of trade for Indian equity markets with frontline indices ending with a weekly cut of around a percent, traders remain worried over the outlook for interest rates following the hawkish remarks by US Fed Chair Jerome Powell. This week, the market will be looking at major economic data such as F&O expiry, India’s external debt, US GDP data, and current account balance that are expected to come out.
Indian economic events: The coming week is likely to see some volatility with the scheduled F&O series expiry on June 29 and traders balancing their positions going ahead for the next series. On the economic front, investors will be eyeing the data on government budget value, external debt, current account deficit, and infrastructure output, scheduled to be released on June 30. The external debt in India was at USD 613.1 billion in the three months to December 2022, lower than USD 613.6 billion a year earlier.
US market data: On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US), starting with Fed Williams speech on June 25 followed by Dallas Fed Manufacturing Index on June 26, Redbook, New Home Sales on June 27, Goods Trade Balance Adv, Fed Chair Powell Speech on June 28, Initial Jobless Claims, GDP Growth Rate, GDP Price Index on June 29, Core PCE Price Index, Personal Income, Personal Spending, and Baker Hughes Oil Rig Count on June 30.
Foreign Investment trends: Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that FPIs continued their May strategy in June too, so far. Globally, Japan continues to attract the biggest inflows, followed by India. They were big sellers in China and also sold in S Korea and Thailand.
“In India, FPIs were big buyers in financials, autos, and capital goods. Since these segments are doing well and their prospects look good, they are likely to attract more inflows, going forward. FPIs continued selling in IT and metals since these sectors are facing many short-term headwinds,” Vijaykumar said. Till June 23, FPIs had invested Rs 30,669 crore in Indian stocks this month. “The yearly FPI equity inflows have risen to Rs 59922 crores. “FPI inflows are likely to moderate, going forward, due to rising valuations in India and the rising interest rate scenario,” he added.
Outlook for the coming week:
NIFTY: Deepak Jasani, Head of Retail Research at HDFC Securities, said that the global stocks fell on Friday, extending their declines for the week and edging towards their worst week since March, as traders feared that central banks’ efforts to curb sticky inflation will lead to recessions and strengthen the US dollar.
Jasani added that the Nifty formed a bearish Dark Cloud Cover pattern on weekly charts after falling 0.85 per cent over the week. “A quick recovery and move beyond the all-time high may be difficult in the near term. Nifty could find support in the 18459-18555 band while 18795 could offer resistance on up moves in the near term.”
Bank Nifty: Kunal Shah, Senior Technical & Derivative analyst at LKP Securities, said the Bank Nifty index witnessed an ongoing battle between the bulls and bears throughout the week. “The index faces resistance at the 44000 level, where the highest open interest is built up on the call side. On the other hand, support is observed at the 43500PE level, where put writers are active.” A break on either side of this range is likely to result in a directional move for the index. However, the overall sentiment remains bearish as long as the index stays below the 44000 level, Shah said.
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