Mumbai: Global factors such as concerns over trade wars and further developments on tariffs, along with the decision of the Organisation of Petroleum Exporting Countries (OPEC) to marginally increase oil production, would drive the domestic equity market in the week ahead.
According to market analysts, progress in the monsoon rains and the macro-economic data due later in the week would also give the market cues.
“The rise in oil prices after the modest supply increase by OPEC would dampen the sentiment in stocks, bonds and the FX (forex) markets,” Delta Global Partners’ Founder and Principal Partner Devendra Nevgi told IANS.
Global event risks, especially the developments on trade wars between the US and China, would be closely monitored, he said.
Geojit Financial Services’ Head of Research, Vinod Nair said: “Progressing monsoon and positive outlook on rural market is giving boost to the economy, which is already showing signs of improvement.”
However, the risk of downgrade in financial year 2019 earnings followed by weak fourth quarter earnings would test investors sentiment, Nair said.
Besides, cues from economic data like Consumer Price Index, Index of Industrial Production and Wholesale Price Index data to be released later in the week also would be a determining factor in the market movement, he added.
According to Equity99’s Senior Research Analyst, Rahul Sharma: “Stock specific action will remain the flavor of the week in an otherwise dull and direction-less trading market where investors look for global clues.”
Sector-wise, oil marketing companies, IT and pharma stocks would be in focus, Nevgi said, adding that invesment-wise the support to the markets “continue to come from domestic investors, given the selling by foreign investors”.
In the week gone by, provisional figures from the stock exchanges showed that foreign institutional investors sold scrip worth Rs 2,088.81 crore, while the domestic institutional investors purchased stocks worth Rs 4,720.76 crore.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 4,528.63 crore, or $665.71 million, in the week ended on June 22.
In the coming week, Gaurav Jain, Director of Hem Securities, feels trading could be volatile as traders would roll over positions in the F&O segment from the near month June 2018 series to July 2018 series.
On a technical basis, the key Indian equity indices, Jasani said, are likely to witness “further upside” in the coming week once the immediate resistance level of 10,837 points on the Nifty50 is breached. Crucial supports to watch for resumption of weakness are at 10,710 points , he said.
In the week just ended, both the key Indian equity indices — S&P BSE Sensex and the Nifty 50 on the National Stock Exchange — rose for the fifth consecutive week, although with marginal gains. The indices ended higher on a weekly basis due to value buying, even as the trade was largely volatile and bearish.
The wider Nifty50 closed trade at 10,821.85 points — up 4.15 points or 0.04 per cent — from its previous close.
Similarly, the barometer 30-scrip Sensex rose by 67.46 points or 0.19 per cent to close at 35,689.60 points on a weekly basis.