Sensex, Nifty this week: GDP growth rate, US jobs data to guide Dalal Street ahead of election results
This week India’s GDP growth rate, bank loan growth, deposit growth, and government budget value (fiscal deficit), are major events that will move the markets.
- May 26, 2024,
- Updated May 26, 2024 4:40 PM IST
Last week, the Indian markets ended with gains of around 2 percent amid positive India Manufacturing PMI data. This week India’s GDP growth rate, bank loan and deposit growth, and government budget value (fiscal deficit) along with the goods trade balance, and jobless claims in the US are major events that will keep the stock markets buzzing.
Economic data: In the coming week, investors will be eyeing major macro-economic data starting with the data of government budget value, infrastructure output, India’s GDP growth rate, Bank loan and deposit growth, and foreign exchange reserves data, which are scheduled to be released on May 31. The Indian economy expanded 8.4 percent year-on-year (YoY) in Q4 2023, the strongest growth since Q2 2022, compared to an upward revision of 8.1 percent in Q3 and beating forecasts of 6.6 percent.
Quarterly results: Traders will be watching important earnings in the last leg of the result season starting with Indian Railway Catering and Tourism Corporation (IRCTC), NBCC (India), Rites, Bata India, Deepak Fertilisers and Petrochemicals Corporation, Emami, IPCA Laboratories, Jindal Poly Films, Lemon Tree Hotels, SJVN, Tata Steel, and Apollo Hospitals Enterprise etc.
FII investments: V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “The FII selling, which began as a trickle in April turned into a flood in May. As per NSDL data FIIs sold equity for Rs 22,046 crore through May 24. FII selling in the cash market was massive at Rs 33,460 crore. This heavy selling was triggered by the massive outperformance of Chinese stocks. The Hang Seng index, dominated by Chinese H stocks (FIIs invest through the Hong Kong market since there are restrictions on investing through the Shanghai market) boomed by 7.66 percent during the last month.
The valuation of Hang Seng had crashed to a PE multiple of around 9 prompting FII buying, triggering the ‘sell India, buy China’ trade. The election-related jitters, too, might have influenced FII selling. Reports about the decline in voter turnout in the first three phases of voting restrained the bulls. The view that it won’t be an easy victory for the BJP/NDA, which the market had largely discounted, gained ground, Vijayakumar added.
The situation is once again slowly changing in favour of the ruling dispensation. The base case scenario appears to be a clear verdict in favour of BJP/NDA. Also, the FII’s massive selling has ceased, and they have even turned buyers in recent days. “Going forward, as clarity emerges on the election front, FIIs are likely to buy in India since they cannot afford to miss the post-election results rally. The rally may begin even before the election results,”, he said.
US market data: On the global front, investors would be eyeing a few economic data from the world’s largest economy the US, starting with the Dallas Fed Manufacturing Index on May 28, Redbook, Richmond Fed Manufacturing Index on May 29, Goods Trade Balance, Initial Jobless Claims, Fed Williams Speech on May 30, Personal Income, Personal Spending, Chicago PMI, Baker Hughes Oil Rig Count on May 31.
Global market update: Mahavir Lunawat, Managing Director of Pantomath Capital Advisors said that the US market trend remains positive and extended further & made a lifetime high across all indices. Last week, Federal Reserve officials expressed their views on a potential interest rate cut decision. “While they will continue to monitor inflation closely and expect it to return to the 2% target over the medium term. Several Fed officials have emphasized the need to maintain steady interest rates, particularly in light of "disappointing" CPI data from the first quarter and a delay in the rate cut decision is expected,” he said.
Lunawat added that Brent crude witnessed profit booking further which is trading around $81 per barrel. The latest FOMC minutes suggested a prolonged period of rise in interest rates and also willingness among members to tighten policy further in the event of inflation surges, raising concerns about potential impacts on energy demand in the world's leading oil consumer.
“While geo-political tension continues to give support to crude oil prices at lower levels in the near term. The market participant is also closely eyeing the upcoming OPEC+ meeting on June 1, where key oil producers are expected to extend output cuts to prevent a global oversupply and stabilise prices,” he said.
Nifty outlook: Rupak De, Senior Technical Analyst at LKP Securities, said, "The Nifty remained sideways during the day after crossing above 23,000. Sentiment might remain subdued in the next few days, with the index ranging between 22,950 and 23,050. Heavy call and put writing activity at 23,000 suggests a possible range-bound trade in the near term. Only a decisive fall below 22,950 might take the index towards 22,800. On the other hand, a sustained movement above 23,050 might lead to a meaningful rally.”
Last week, the Indian markets ended with gains of around 2 percent amid positive India Manufacturing PMI data. This week India’s GDP growth rate, bank loan and deposit growth, and government budget value (fiscal deficit) along with the goods trade balance, and jobless claims in the US are major events that will keep the stock markets buzzing.
Economic data: In the coming week, investors will be eyeing major macro-economic data starting with the data of government budget value, infrastructure output, India’s GDP growth rate, Bank loan and deposit growth, and foreign exchange reserves data, which are scheduled to be released on May 31. The Indian economy expanded 8.4 percent year-on-year (YoY) in Q4 2023, the strongest growth since Q2 2022, compared to an upward revision of 8.1 percent in Q3 and beating forecasts of 6.6 percent.
Quarterly results: Traders will be watching important earnings in the last leg of the result season starting with Indian Railway Catering and Tourism Corporation (IRCTC), NBCC (India), Rites, Bata India, Deepak Fertilisers and Petrochemicals Corporation, Emami, IPCA Laboratories, Jindal Poly Films, Lemon Tree Hotels, SJVN, Tata Steel, and Apollo Hospitals Enterprise etc.
FII investments: V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “The FII selling, which began as a trickle in April turned into a flood in May. As per NSDL data FIIs sold equity for Rs 22,046 crore through May 24. FII selling in the cash market was massive at Rs 33,460 crore. This heavy selling was triggered by the massive outperformance of Chinese stocks. The Hang Seng index, dominated by Chinese H stocks (FIIs invest through the Hong Kong market since there are restrictions on investing through the Shanghai market) boomed by 7.66 percent during the last month.
The valuation of Hang Seng had crashed to a PE multiple of around 9 prompting FII buying, triggering the ‘sell India, buy China’ trade. The election-related jitters, too, might have influenced FII selling. Reports about the decline in voter turnout in the first three phases of voting restrained the bulls. The view that it won’t be an easy victory for the BJP/NDA, which the market had largely discounted, gained ground, Vijayakumar added.
The situation is once again slowly changing in favour of the ruling dispensation. The base case scenario appears to be a clear verdict in favour of BJP/NDA. Also, the FII’s massive selling has ceased, and they have even turned buyers in recent days. “Going forward, as clarity emerges on the election front, FIIs are likely to buy in India since they cannot afford to miss the post-election results rally. The rally may begin even before the election results,”, he said.
US market data: On the global front, investors would be eyeing a few economic data from the world’s largest economy the US, starting with the Dallas Fed Manufacturing Index on May 28, Redbook, Richmond Fed Manufacturing Index on May 29, Goods Trade Balance, Initial Jobless Claims, Fed Williams Speech on May 30, Personal Income, Personal Spending, Chicago PMI, Baker Hughes Oil Rig Count on May 31.
Global market update: Mahavir Lunawat, Managing Director of Pantomath Capital Advisors said that the US market trend remains positive and extended further & made a lifetime high across all indices. Last week, Federal Reserve officials expressed their views on a potential interest rate cut decision. “While they will continue to monitor inflation closely and expect it to return to the 2% target over the medium term. Several Fed officials have emphasized the need to maintain steady interest rates, particularly in light of "disappointing" CPI data from the first quarter and a delay in the rate cut decision is expected,” he said.
Lunawat added that Brent crude witnessed profit booking further which is trading around $81 per barrel. The latest FOMC minutes suggested a prolonged period of rise in interest rates and also willingness among members to tighten policy further in the event of inflation surges, raising concerns about potential impacts on energy demand in the world's leading oil consumer.
“While geo-political tension continues to give support to crude oil prices at lower levels in the near term. The market participant is also closely eyeing the upcoming OPEC+ meeting on June 1, where key oil producers are expected to extend output cuts to prevent a global oversupply and stabilise prices,” he said.
Nifty outlook: Rupak De, Senior Technical Analyst at LKP Securities, said, "The Nifty remained sideways during the day after crossing above 23,000. Sentiment might remain subdued in the next few days, with the index ranging between 22,950 and 23,050. Heavy call and put writing activity at 23,000 suggests a possible range-bound trade in the near term. Only a decisive fall below 22,950 might take the index towards 22,800. On the other hand, a sustained movement above 23,050 might lead to a meaningful rally.”