The Indian stock market is poised for an interesting week, influenced by a mix of global and domestic factors that emerged over the weekend. Here are ten key things that could impact market movement:
1. Positive Cues from GIFT Nifty:
Early indications suggest a positive opening for the Indian stock market today. The GIFT Nifty was trading around 26,166, a premium of approximately 89 points compared to the Nifty futures' previous close, signaling an optimistic start. GIFT Nifty, formerly known as SGX Nifty, serves as an indicator for the Nifty 50's potential performance, helping traders gauge market direction before the official opening. The shift of SGX Nifty to GIFT City in Gujarat aims to boost liquidity and attract foreign investors to Indian markets.
2. Global Market Trends:
Asian markets are showing positive trends, mirroring a rally on Wall Street driven by increasing hopes for a US Federal Reserve rate cut. South Korea's Kospi has already rallied significantly, while Hong Kong Hang Seng index futures also point towards a higher opening. However, Japan's markets are closed for a public holiday. The US stock market closed higher on Friday, although major indexes still recorded weekly losses due to concerns about technology valuations.
3. India-US Trade Deal Developments:
Investors are closely watching developments surrounding a potential India-US trade deal. According to Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, progress in these trade talks could act as a short-term catalyst for the markets. Rupee could bounce to 88/$ on trade deal, slip with delay.
4. Q2 GDP Data:
The release of India's Q2 GDP data will be a crucial factor influencing market sentiment this week.
5. Trends in the Rupee:
The movement of the Indian Rupee against the US dollar will be another key element to monitor. Recently, the rupee weakened past the 89/$1 level for the first time, which occurred as the Reserve Bank of India (RBI) ceased its interventions.
6. Foreign Institutional Investor (FII) Flows:
The inflow and outflow of funds from Foreign Institutional Investors (FIIs) can significantly impact market liquidity and direction.
7. Gold Prices:
Changes in gold prices are expected to influence the stock market. Gold is considered a safe-haven asset, especially during times of economic uncertainty. Historically, there has been an inverse relationship between gold prices and the stock market, where gold tends to perform well when the stock market declines. High gold prices can negatively affect consumer sentiment and buying patterns.
8. Geopolitical Developments: Ukraine Peace Plan
Developments surrounding the Ukraine war, including potential peace talks, are also being monitored. A peace agreement could lead to lower energy prices, boosting equities and currencies in Europe. Markets have responded to news of potential US-Russia negotiations, with Brent crude oil prices dropping and European natural gas prices also declining.
9. Domestic and Global Macroeconomic Data:
Other key domestic and global macroeconomic data releases will provide further direction to the market.
10. Technical Levels and Market Sentiment:
The Nifty 50 is facing resistance near 26,200, and range-bound action is expected. According to Rupak De, Senior Technical Analyst at LKP Securities, immediate support for Nifty is in the 26,000-25,900 range, while resistance is at 26,166.
On Friday, the Indian stock market ended lower, snapping a two-day winning streak due to a fall in financial heavyweights. The Sensex declined by 400.76 points (0.47%) to close at 85,231.92, while the Nifty 50 settled 124.00 points (0.47%) lower at 26,068.15.
