Stock market this week: Following strong global cues, short covering by FIIs and banking stocks’ rally on Dalal Street, Indian stock market ended in positive territory on sixth straight session. Nifty 50 index gained 4.17 per cent whereas BSE Sensex shot up 4.30 per cent in the week gone by. After long spree of selling, FIIs remained net buyers on four out of 5 sessions last week.
“During the week gone by, we were not expecting a one sided move in the market and we expected the rally to get arrested near 16,450 mark. However; the stock market bulls unleased during the week and we saw a move of over 4 per cent in the index NIFTY spot. This was mainly on the back of positive global cues and short covering by the FIIs in the index futures,” said Mehul Kothari, AVP — Technical Research at Anand Rathi.
“This week was terrific for the markets as it gained on all 5 sessions. Over the last month, mid-caps and small-caps have gained 10+ per cent. Due to the cooling of commodity prices, FMCG and Autos have rallied, and there are early signs of revival in rural demand. But the next week might not be all positive as the US FED is going to meet next week for their policy decisions, and another rate hike might spook the markets,” said Sonam Srivastava, Founder at Wright Research.
Here we list out top 5 triggers that may impact Indian stock markets this week:
1] US Fed meeting: “On account of hawkish stance of the US central bank, market is expecting a big rate hike announcement from the US Federal Reserve’s monetary policy meeting. This is expected to set the tone for future financial markets as it may trigger FIIs’ selling once again because US bond yield is expected to attract more money than the equity market in such a scenario,” said Anuj Gupta, Vice President — Research at IIFL Securities. He also said that Dollar index has eased in the week gone by and US Fed interest rate hike may again fuel the demand for US dollar as an ‘investor’s have’ leading to sharp rise in the US dollar (USD) against major currencies including Indian National Rupee (INR).
2] US Q2 GDP data: “The Q2 gross domestic product (GDP) numbers of the US is coming on 28th July 2022 and the whole world is eagerly awaiting this release. This data is expected to give an ideal picture of the US economy and it will set the tone of global equity markets, including the Dalal Street. Positive Q2 GDP numbers may trigger a rally at Nasdaq, which is closely followed by Indian IT stocks. As Nasdaq follows US job data and FDP numbers, any positive announcement on the GDP front from the US government may trigger a trend reversal in the Indian IT stocks,” said Anuj Gupta of IIFL Securities.
3] Nasdaq index: “One has to remain vigilant about the results of 5 big Nasdaq listed tech companies — Microsoft, Google, Meta Platforms, Apple and Amazon. These companies are going to announce its quarterly earning next week. An announcement of positive quarterly earnings by these tech giants may lead to extension of Nasdaq rally started last week. Apart from this, Nasdaq follows US jobs and GDP data and US Q2 GDP is coming on 28th July next week. So, Indian bulls awaiting trend reversal in Indian IT stocks are advised to remain glued to these triggers related to Nasdaq index,” said Anuj Gupta.
4] Company results: “Next week we will see more than 200 companies post their earnings. Among them are HDFC, TATAMOTORS, ITC, LT, ASIAN PAINT, and BAJFINANCE, among many other prominent names. The numbers posted, as well as the management commentary, will be critical for the direction of the market,” said Sonam Srivastava.
5] Commodity prices: “Crude oil has cooled down to 96$/barrel, and many are cheering this as the cue for an easing in inflation. Similarly, metal prices are low, bringing cheer to commodity consumers, but given the inflationary environment, you never know when the prices will start flaring up again. So commodity prices will be a crucial trigger to watch for,” said Sonam Srivastava.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.