Q1 results to US job data: Top 5 triggers that may dictate market next week


Stock market next week: In the week gone by, the Nifty consolidated within a narrow range till the expiry day. However, post-expiry a sharp cut in the heavyweight Reliance Industries resulted in a dip in the index towards 15,500 levels. But except for oil and gas, the other sectors performed well, and hence, the index recovered from the lows to end at around 15,750 with a marginal loss.

Speaking on stock market wrap last week, Ruchit Jain, Lead Research at 5paisa.com said, “Nifty consolidated within a narrow range for the most part of the week and finally it witnessed a sharp cut on Friday morning. Friday’s down move was majorly due to a sharp cut in the index heavyweights from the Oil & Gas space which corrected on news flows. However, Nifty has managed to take support around 15500 and it recovered the losses towards the end due to participation from the other sectors. On the short-term charts, this week’s low of 15511 marked another higher low which is a good sign. On the flip side, participation from the broader markets should also keep the positive momentum intact. Also, if we look at the derivatives rollover data, then it is seen that rollovers in Nifty were lower than average which indicates that lesser shorts have been rolled to the July series. FII’s positions in index futures are short heavy and any positive turnaround in the global markets could then lead to some short-covering by them.”

Ruchit Jain of 5paisa.com went on to add that till the Nifty 50 index trades above the 15,500 mark, one should continue to trade with a positive bias and look for stock-specific buying opportunities in the coming week.

However, one needs to remain vigilant about the major triggers that may change the direction of the markets on either side. Here we list out top 5 triggers that may dictate stock market next week:

1] Q1 results: Q1FY23 earnings will start trickling next week, and everyone will be watching for any downgrades or negative commentary. For those who believe in stock-specific trade during volatile markets, upcoming Q1 earnings would be crucial for the Indian stock market.

2] Global macroeconomic data: “Large European nations are releasing the inflation and industrial activity data. In addition, the US is releasing jobless claims (job inflation and non-farm payroll data), and the FOMC will give an economic outlook. The commentary from these events will be the biggest movers of the markets,” said Sonam Srivastava, Founder at Wright Research — a SEBI registered investment advisor company.

3] US Fed meeting: “The US central bank’s meeting for June 2022 is scheduled next week and the US Fed officials are expected to provide clarity on their hawkish stance. Any further hawkish stance on US Fed interest rates is expected to put the global equity market under pressure,” said Anuj Gupta, Vice President — IIFL Securities.

4] Dollar index: “Last week DX ascended and continue to oscillate around its two-decades high levels that boosted the FIIs’ net seller sentiments. Any further rise in the DX, which has strong resistance around the 106 mark, may fuel the selling sentiments of the FIIs. However, ease in DX is expected to boost Indian markets. So, one needs to remain vigilant about the dollar index next week,” said Anuj Gupta of IIFL Securities.

5] Rupee vs dollar: “Indian Rupee is at a lifetime low. We are already at 79 rupees for each dollar, and we could see the number touching 80 soon. The depreciating rupee has a far-reaching effect on our trade balance, inflation numbers, and growth and will be a key trigger,” said Sonam Srivastava.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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