This upcoming week, beginning May 29, is seen as crucial by stock market traders. Because many factors influence how the market will perform this week. Let’s take a look at those variables.
1. International markets
Tech stocks rallied on the U.S. stock market as chipmaker Marvell Technology developed strong demand for artificial intelligence. The company’s profit is expected to increase by 33 percent in the coming financial year.
The Dow 30 rose 1% to 33,093.30, while the S&P 500 closed 1.30% higher at 4,205.45 during Friday trading. The Nasdaq Composite rose 2.19% to end at 12,975.70.
While Indian markets will resume on Monday, US markets will trade based on Friday’s levels. In honour of Memorial Day next Monday, US markets are on holiday.
2. Global Events
US President Joe Biden and top congressional Republican Kevin McCarthy on Saturday struck a tentative deal to raise the federal government’s $31.4 trillion debt ceiling. They say that economic destabilization through this agreement will prevent default.
UK markets are closed on Monday. China is also set to release a slew of economic-determining data this week. This means that the PMIS data will be released on Monday. In other key events, UK S&P Global/CIPS UK Manufacturing PMI, US Consumer Confidence data and S&P Global US Manufacturing PMI, Initial Jobless Claims data are due out next week.
3. Technical Factors
On December 1, 2022, the Nifty hit an all-time high of 18,887.60. This is a mere 2.10% growth. Continued buying from here could take Nifty to 18,700-18,800 zones, while the downside support now shifts from 18,200 to 18,300.
4. FII/DII activity
FII and DII activity will be crucial in how the markets perform on Monday. On Friday, foreign institutional investors (FIIs) were net buyers and bought Indian stocks worth Rs 350.15 crore. Meanwhile, domestic institutional investors (DIIs) were net buyers at Rs 1,840.98 crore.
5. Corporate Events
In a top corporate event, Allcargo will consider raising up to Rs 500 crore on Monday. There are reports that Torrent Power will consider raising funds by issuing NCDs of up to Rs 3,000 crore on the same day.
Ratan India Power, Welspun Corp, Prestige Estate, Jindal Worldwide and Bank of Baroda will also consider hikes during the week. Hinduja Global has announced that it will buy back shares from investors on June 2.
6. Crude Oil
Crude oil will also play an important role in the stock market movement. Market participants should watch the movement of the dollar index.
Benchmark U.S. crude for July delivery rose 84 cents to $72.67 a barrel on Friday. Brent crude for July delivery was up 69 cents at $76.95 a barrel. Total gasoline for June delivery rose 3 cents to $2.70 a gallon.
7. Rupee vs Dollar
The rupee traded in a narrow range between 82.73-82.60 due to strong buying in the capital markets in the last two days due to weakness in crude prices in the last 24 hours. It traded between $74 and $71.50.
If the US raises the debt ceiling in the coming days, the rupee trend is expected to be positive. This is said to lead to strong selling in the US dollar. At the same time, any indication of a delay in raising debt would favour the dollar and weaken the rupee. The INR is expected to touch 82.50 against the dollar in the next few sessions.
8. Gold
MCX June gold futures closed 0.15% lower at Rs 59,372. Meanwhile, the July silver future was Rs. 1,049 increased to Rs.71,291. Gold is taking cues from developments surrounding the US debt ceiling crisis.
June gold future prices range between Rs 58,800 – Rs 59,400 and resistance Rs 60,000 – Rs 60,400.
9. Bond Yields
Yields on Indian government bonds are said to be largely unchanged in the coming week as focus shifts from rising banking system liquidity after the Fed’s demonetisation and a sustained spike in US yields.
The benchmark 10-year 7.26% 2033 bond yield ended at 7.0068% in the previous session.
10. Vital Data of India
On May 31, the central government will release GDP and fiscal deficit numbers. On June 1, S&P Global PMI manufacturing data will be released.
These 10 things are said to determine the direction of the Indian stock market in the coming week.
