Bull Vs Bear: Top 5 catalysts that may dictate the stock market this week

Bull vs Bear: After last week saw a series of choppy sessions, the Nifty 50 index consolidated within a broad range of 15,900 to 16,400 during the week, but recovered from its expiration-day lows and the momentum continued in the last trading session to finish above 16,350 with Gains of more than half a percent. In the past three weeks, the index has consolidated within a wide range and Nifty has finished near the higher end of the range. However, the Bank Nifty’s relative outperformance was encouraging and it actually gave a breakout from its resistance on expiry day and continues to outperform.

Now if we look at the sectoral indices, Nifty IT has shown signs of retreating from its support while Nifty Midcap 100 has also reversed from its previous lower support. Therefore, it becomes important for traders and investors to know the major catalysts that may dictate the Indian stock market next week.

Speaking about the factors that may affect the movement of Dalal Street next week, Anuj Gupta, Vice President – Research at IIFL Securities, said, “The pullback in the last session of the market should be seen as a relief recovery and one should remain vigil about the market. Main. Triggers such as dollar index movement, ECB on rate hike, Indian GDP data, Chinese manufacturing data, US non-farm payrolls data, employment data, etc.”

Here are the 5 most important catalysts that may affect the stock market next week:

1]Dollar Index: The dollar index saw further declines and reached around 101 after rising to a 20-year high two weeks ago. Movement in the dollar index on both sides will decide the fate of global markets including India.

“If the dollar index falls further, it could trigger breaks in FII sales while a rebound in the index from here could accelerate the selling of FIIs,” said Anuj Gupta of IIFL Securities.

2]India’s GDP: “There are various expectations about India’s GDP figure. Recently, Moody’s lowered India’s GDP growth forecast to 8.8% from 9.% due to rising inflation. This figure is still higher than the Reserve Bank of India (RBI) forecast of 7.2% Possibly, an official announcement sometime next week “with regard to the GDP outlook for this fiscal year will have a certain impact on the markets,” Sonam Srivastava, founder of Right Research, said.

3]Chinese manufacturing data: This will be a big event that an investor in the market cannot miss. “China is in a deflationary phase and lowering interest rates. This has led to a significant depreciation of its currency and as a result, major global hedge funds are sinking Chinese stocks. This affects all emerging markets and India is no different. Watching closely and maybe monitoring should be done,” Sonam Srivastava said. This event is bound to drive market conditions.”

4]European Central Bank: After the US Federal Reserve’s hawkish stance on raising interest rates, there is high speculation that the European Central Bank may boost interest rates. If this happens, it will have a major impact on global stock markets, said Anuj Gupta of IIFL Securities, as FIIs may decide to move towards the euro after taking profits in dollars.

5]Nonfarm Payrolls and US Employment Data: This release is expected on Friday next week. In the case of disappointing numbers, there could be a sharp sell-off across global markets as speculations about a slowdown in the US economy may get support from these weak numbers.

Disclaimer: The opinions and recommendations above are those of individual analysts or brokerages and are not issued by the mint.

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