What to Expect in the Equity Market This Week: Key Data and Global Trends
Market Trends and Influences
New Delhi: This week, the equity market's direction will be influenced by various macroeconomic data releases, global market trends, and the trading activities of foreign investors, according to analysts.
The previous week saw stock markets end on a low note as investors faced global uncertainties.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted that the market's lackluster performance stemmed from both global and domestic factors. Rising US bond yields and concerns regarding the increasing US debt burden led to foreign portfolio outflows, which pressured emerging markets like India.
Looking ahead, the release of India's industrial and manufacturing production data for April, set for May 28, along with the Q1 GDP growth figures, will provide insights into the economic recovery path.
Additionally, updates on the monsoon's progress will be closely observed.
On the international front, developments in the US bond market, the release of minutes from the Federal Open Market Committee (FOMC), and advancements in India-US trade negotiations will continue to shape market sentiment, Mishra added.
Furthermore, the upcoming monthly expiry of May derivatives contracts and the conclusion of the Q4 earnings season, featuring results from major companies like Bajaj Auto, Aurobindo Pharma, and IRCTC, will be significant.
Last week, the BSE benchmark fell by 609.51 points, or 0.74%, while the NSE Nifty dropped by 166.65 points, or 0.66%.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, expressed optimism for the markets, anticipating firm conditions with broader market participation as macroeconomic and earnings support continues. Investors will be keenly watching key data releases this week, including quarterly GDP figures for both India and the US.
On Friday, the Reserve Bank announced a record dividend of Rs 2.69 lakh crore to the government for FY25, which is 27.4% higher than the previous fiscal year, aiding the exchequer in managing challenges posed by US tariffs and increased defense spending due to the conflict with Pakistan.
Market participants will initially respond to the RBI's substantial dividend transfer and its implications for fiscal policy, Mishra noted.
With ongoing uncertainties surrounding the US economy, foreign investment flows, and trade negotiations, Indian markets may experience a consolidation phase in the near future, according to Gaurav Garg from Lemonn Markets Desk.
The market has shown volatility over the past week, driven by concerns regarding US fiscal health amid rising debt, an expert commented.
Vinod Nair, Head of Research at Geojit Investments Limited, mentioned that investor focus is shifting towards US-India trade discussions and robust domestic macroeconomic indicators. However, recent foreign institutional investor outflows, prompted by rising US bond yields and concerns over increasing US debt, may dampen market sentiment.
Nair added that optimism surrounding a potentially record-high dividend from the RBI is fostering hopes for fiscal consolidation, as reflected in declining Indian bond yields.