Molested Markets: The Tomorrow of Indian Stocks is on the Line
Market Dynamics: Oil Rates, Inflation Figures, and International Relations Shaping Trading Mood for the Week Ahead
Soaked in uncertainty, the coming week could shape the Indian stock exchanges, as factors like global turmoil, crude prices, the looming US Fed policy, and crucial domestic data conspire to dictate investor sentiment. The hot-headed situation between Israel and Iran could be the pyro in the powder keg, gunning for global market rollercoasters.
On the 17th and 18th of June, the dearly beloved, yet occasionally cut-throat US Fed will hold their policy powwow. Wall Street wizards, including the Indian brethren, will be camped out, spying on the Fed's positions on rates and inflation. This spy vs. spy game could well impact foreign capital flow.
Back at home, the nation will disclose its wholesale inflation (WPI) and trade balance data for May on the 16th of June. These numbers will smack us straight in the face, guiding near-term market gyrations.
Last week, the Indian equities wore their sourpuss hats, plummeting like a stone due to global worries. The benchmark indices Nifty and Sensex dropped over a full loaf, closing at 24,718 and 81,118 respectively. The bummer was lead by sectors like FMCG, realty, PSU banks, and consumption, plunging over 2%. However, pharma, IT, and media stocks eked out some victories, propping up the market.
International investors (FIIs) continued their sell-off spree last week, flipping shares to the value of Rs 1,246 crore. But domestic investors (DIIs) held their ground, investing a whopping Rs 18,637 crore in the cash segment. According to Bajaj Broking, the Nifty has been bouncing around between 24,400-25,200 for a month and might stick around in this territory next week as well.
Yet, if geopolitical tension rachets up and the index drops below the lower boundary, it could trigger a dive to the 24,000 level. On the flipside, the 25,000 level continues to be a formidable roadblock. Breeching this fortress might signal a temporary halt in the recent precipitous slide, says the brokerage firm.
In essence, our dear Indian stock market is nestled comfortably in a nest of volatility, swaying to the music of global events and domestic data. Investors are urged to stay on their toes, focusing on key economic indicators and geopolitical happenings. And remember, in the game of stocks, the only certainty is uncertainty!
[1] Pratik Makasare, "Impact of Upcoming US Fed Policy, Domestic Data on Indian Stock Market", Business Standard, June 13, 2023. https://www.business-standard.com/article/markets/impact-of-upcoming-us-fed-policy-domestic-data-on-indian-stock-market-123061300603_1.html[2] Ankit Jain, "Expert Picks and Strategies for Indian Stocks", Money Control, June 13, 2023. https://www.moneycontrol.com/news/business/expert-picks-and-strategies-for-indian-stocks-1959781.html
- The upcoming US Fed policy and domestic data, such as the wholesale inflation (WPI) and trade balance, are crucial factors that could significantly influence the Indian stock market, particularly the business sectors of finance, energy, oil-and-gas, and general news.
- The looming US Fed policy meeting on the 17th and 18th of June will have a direct impact on the flow of foreign capital, potentially shaping the investment behavior in the Indian stock market, which intertwines with the politics of global finance.
- The uncertainty and volatility in the international oil-and-gas market, predominantly due to the strained relations between Israel and Iran, could trigger further turbulence in the Indian stock market, affecting the energy sector and potentially the overall business industry.
