NEW DELHI: Macro-economic data and the Federal Open Market Committee (FOMC) outcome are likely to be the main driving force for the Indian equity market this week after bears made a comeback during the last two sessions of the previous week following the RBI’s tough stance on keeping inflation in check.
The two benchmark indices, Nifty and Sensex, made a minor gain last week to settle at 18,563.40 and 62,625.63 levels, respectively. Among the key data, India’s consumer inflation and wholesale Inflation, Industrial Production data, Manufacturing Output, forex reserve and trade balance will be out this week.
Some key global events such as US CPI data and FOMC meeting will also be in focus as they may decide the future course of action taken by central banks worldwide. The Federal Reserve on June 14 is expected to announce a pause in the rate hike cycle after 11 consecutive rate hikes. The European Central Bank (ECB) and Bank of Japan (BoJ) will also announce their policy decisions.
“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,” said Vinod Nair, Head of Research at Geojit Financial services.
Siddhartha Khemka, Head - Retail Research at Motilal Oswal Financial Services Ltd, said, “The overall structure of the market remains positive, supported by lower volatility, healthy macros, and consistent Foreign Institutional Investors (FIIs) buying.”
Commenting on the technical outlook, Arvinder Singh Nanda, Senior Vice President, of Master Capital Services, said that the Nifty index has formed a shooting star candlestick pattern which suggests a possible reversal in the current trend. “As a result, we anticipate the price to pave the way for the support zone of 18480-18460, in close proximity to the 21-day EMA. A decisive break below this support level may lead to a further decline towards 18320,” said Nanda.