Investors to focus on factory and services activity, GDP data next week: Experts
Talking about the coming week, Ajit Mishra, Vice-President Research, Religare Broking, said, "The coming week marks the beginning of the new month also so participants will be eyeing high-frequency data viz. auto sales, manufacturing PMI and services PMI data. Before that, the GDP data, scheduled on May 31, will also be on their radar. Apart from these factors, the performance of the US markets amid the ongoing debt ceiling talks will be in focus."
In two weeks, markets witnessed a consolidation phase and experts said this momentum is expected to continue. One of the experts even went on to say that Nifty will touch its previous lifetime high in the coming weeks. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said, "The index (Nifty) is now just 380 points or 2 per cent away from its lifetime high. With result season nearing its end, the focus will now shift to macro data, US debt negotiations and upcoming central bank policy meetings.
Talking about the coming week, Ajit Mishra, Vice-President Research, Religare Broking, said, "The coming week marks the beginning of the new month also so participants will be eyeing high-frequency data viz. auto sales, manufacturing PMI and services PMI data. Before that, the GDP data, scheduled on May 31, will also be on their radar. Apart from these factors, the performance of the US markets amid the ongoing debt ceiling talks will be in focus." According to Ajit Mishra, markets ended a 2-week long consolidation phase and gained over one and a half per cent.
He said, "After a firm start, the benchmark remained range bound in the middle, tracking mixed global cues; however strong recovery in the final sessions changed the tone." "Consequently, Nifty managed to surpass the hurdle at 18,400 and settled around the week's high at 18,499.30 levels. All sectors contributed to the move wherein metal, pharma and IT were the top gainers," Mishra said, adding, "The buoyancy continued on the broader front, with the midcap index scaling to a new high."
The deadlock in the US between Democrats and Republicans over raising the debt ceiling, the German recession and hawkish comments from officials of Federal Reserve have been on investors' minds for some time. Vinod Nair, Head of Research at Geojit Financial services, said the performance of the domestic market during the week was influenced by global cues, including concerns surrounding the ongoing US debt ceiling negotiations, the German recession, and hawkish comments from US Fed officials.
"However, a significant surge in sales projections by chipmaker Nvidia helped in the recovery of the US tech sector," said Nair, which explained how some of the IT stocks went up during the week. On the stocks' movement during the week, Santosh Meena, Head of Research, Swastika Investmart, said, "Interestingly, export-oriented sectors such as IT, Pharma, and Metal outperformed others, recording gains of approximately 4-6 per cent."
Meena said market participants, this coming week, will closely monitor institutional flows, as there is a historical observation that when both FIIs (foreign institutional investors) and DIIs (domestic institutional investors) become net buyers simultaneously, there is a likelihood of some profit booking in the market. On corporate earnings, Ajit Mishra said, "As we are entering into the last leg of the earnings season, we have companies like Aurobindo Pharma, Apollo Hospitals, Adani Ports, IRCTC and PFC, which will be announcing their numbers during the week."
Regarding investors' sentiments during the past week, Vinod Nair said, "The release of the Federal Open Market Committee (FOMC) minutes revealed differences of opinion regarding future policy measures, with a slight leaning towards a less aggressive approach. Domestic investors traded cautiously during the week; however, driven by the strong growth forecast for the Indian economy, the market witnessed a smart recovery towards the end." On optimism over the coming week, Vinod Nair said, "The IT and pharmaceutical sectors rebounded due to bargain opportunities and pent-up demand. With the upcoming Q4 (fourth quarter) GDP data, it is anticipated that India's FY23 GDP will surpass the earlier projected 7 per cent growth rate, thereby improving the overall outlook of the Indian economy."
Santosh Meena, Head of Research, Swastika Investmart, said, "Banknifty is probably going to accomplish its unfinished task of setting a new record high. It was a highly favourable week for the bulls as the Nifty managed to close at a significant milestone of 18,500 points. "Additionally, the Nifty Midcap index reached a record high, while Banknifty is poised to achieve a fresh all-time high," Meena said, adding, "Notably, the institutional inflow was a key driver of the market's strength, with both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) acting as net buyers throughout the entire week. FIIs infused over Rs 3,200 crore, while DIIs injected more than 3,400 crore into the market."
Santosh Meena said Banknifty is poised to surpass its previous high of 18,152 and potentially reach a new all-time high at the beginning of the week. "The next resistance levels to watch out for are 44,444 and 45,000. "In terms of support, 43,700 is a strong immediate level, followed by 43,000 as the subsequent support level," Meena said. (ANI)
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