Stock market triggers: US Fed policy, IIP, CPI, among factors that may drive Sensex, Nifty this week

On Friday, Sensex closed closed 223 points, or 0.35 per cent, lower at 62,625.63 while the Nifty ended at 18,563.40, down 71 points, or 0.38 per cent.

The domestic market had a positive start to the week, buoyed by favourable indicators such as stronger-than-expected PMI figures, sequential growth in auto sales, and robust expansion in bank credit, said Vinod Nair, Head of Research at Geojit Financial services

“However, market sentiment was dampened as the RBI opted for a cautious approach by refraining from a significant cut in the inflation forecast. The central bank cited concerns over geopolitical uncertainties, the potential impact of El Nino, and the rise in the minimum support price while reaffirming their commitment to bringing down inflation to near the targeted 4%,” he said.

Eventually, both the benchmark indices, Nifty and Sensex, closed almost unchanged at 18,563.40 and 62,625.63 levels respectively.

“The key sectoral indices witnessed a mixed trend wherein auto, energy and realty posted decent gains while IT and FMCG ended lower. Amid all, the broader indices managed to outperform for yet another week and gained in the range of 0.5%-1.2%,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd

What to expect in the week ahead?

The coming week June 12-16 is going to be an eventful one as US Fed policy outcome for cues, which is scheduled on June 14. In the following sessions, the European Central Bank (ECB) and Bank of Japan will also announce their policy decision. On the macroeconomic front, participants will be tracking IIP data, CPI Inflation and WPI Inflation during the week. Apart from these factors, the updates on progress of the monsoon will also remain on their radar.

“We recommend maintaining a positive stance till Nifty holds 18,400 and suggest focusing on sectors, which are showing relatively higher strength like auto, FMCG & realty and picking selectively from others. In case of a decline, the 18,100-18,200 zone would offer the needed cushion. We feel the prevailing outperformance may continue in the broader indices so continue to add quality stocks from midcap and smallcap space,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd.

Market participants are now eagerly awaiting the release of domestic inflation data for May, which is anticipated to show a cooling down from the current level of 4.7%.

“Global cues will also play a significant role in shaping the market trend, with investors closely monitoring the outcomes of the FOMC meeting and the US inflation print.Indian settled almost flat for the second consecutive week amid mixed cues. The beginning was subdued but buying in select heavyweights in the middle tried to change the tone,” said Vinod Nair, Head of Research at Geojit Financial services.

Updated: 11 Jun 2023, 06:56 AM IST