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Week Ahead: Inflation data, US Fed policy, global cues among key market triggers


Indian stock markets witnessed a roller coaster ride with the onset of June 2024 as frontline indices swung sharply in both directions due to the exit polls predictions and the surprise outcome of the Lok Sabha election results 2024.

Domestic equity benchmarks recorded the biggest weekly gain of 2024 after a volatile week. The indices began the week hitting all-time highs and rose 3.25 per cent on optimism of a memorable win for the ongoing government. The surprise poll outcome, with the ruling Bharatiya Janata Party (BJP) failing to get an absolute majority on its own, saw markets crash around seven per cent on the counting day of June 4.

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However, bulls were back with a bang as soon as clarity emerged regarding PM-elect Modi and his allies coming to power again, forming a coalition government. The recovery rally on Wednesday and Thursday came as domestic buying overpowered foreign sales leading to benchmark indices closing the week near all-time highs. The Nifty 50 logged its best week since early December, while the Sensex recorded its best week in nearly two years.

The Reserve Bank of India’s Monetary Policy Committee (MPC) kept the repo rate unchanged at 6.5 per cent in its first meeting since Lok Sabha Elections 2024. The rate-setting panel decided to hold the key policy rate for the eighth consecutive time in its June 2024 meeting, but slightly raised the FY24 growth projection.

Nifty added 3.4 per cent this week, while the Sensex rose 3.7 per cent, recouping all losses made on Tuesday. All major sectors participated in the rally, with IT, FMCG, and Auto leading the way. The broader indices also saw significant interest, each gaining around three per cent. Analysts believe volatility is likely to decrease now that major events are behind us, with the focus shifting to domestic macroeconomic data and the Union Budget.

Moving to the second week of June, investors will keenly eye the ongoing Lok Sabha election developments, the upcoming US Fed interest rate decision, domestic and global macroeconomic indicators, foreign fund inflow, crude oil prices, and global cues.

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In the coming week, primary markets will witness a few new initial public offerings (IPO) and listings which are slated across the mainboard and small-and-medium enterprises (SME) segment. The week will be critical from the domestic and technical point of view as investors will global indicators and the monetary policy.

Overall, market analysts expect that election-related volatility is over, and Nifty 50 may now move towards 23,400-23,500 levels on the upside if the 23,000 level is not broken. Experts advise traders to remain cautious and focus on stocks moving in line with the benchmark.

Here are the key triggers for stock markets in the coming week:

Domestic macroeconomic data

Domestically, India’s economic calendar is also marked with key releases. On June 12, 2024, both India’s industrial production data and inflation rate data will be unveiled. These figures are crucial indicators of the country’s economic health and can likely influence market sentiment and policy decisions.

On June 14, 2024, India’s balance of trade data will be released, providing insights into the nation’s trade dynamics and external sector performance. This data is closely watched by investors and policymakers for its…



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