The stock markets ended a two-week-long consolidation phase and gained over one-and-a-half per cent by the end of the week. Last week, the Sensex benchmark ended at 62,501.69 and Nifty was able to surpass the 18,400 hurdle and settle near the week's high of 18,499.35.
All sectors contributed to the move wherein metal, pharma and IT were the top gainers. The buoyancy continued on the broader front, with the midcap index scaling to a new high.
Last week, the performance of the domestic market was influenced by global cues, including concerns surrounding the ongoing US debt ceiling negotiations, German recession and hawkish comments from the US Fed officials, said Vinod Nair, Head of Research at Geojit Financial Services.
Stock markets this week would be largely driven by macroeconomic data, auto sales numbers, FII inflows and global trends.
"This 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, GDP data scheduled on May 31, will also be on their radar," said Ajit Mishra, VP Research, Religare Broking.
The US debt ceiling negotiations and institutional flows will also be watched by investors.
"This week, market participants will closely monitor institutional flows, as there is a historical observation that when both FIIs and DIIs become net buyers simultaneously, there is a likelihood of some profit-booking in the market," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
US debt ceiling talks
On the global front, the US debt ceiling issue holds significant importance, alongside US macroeconomic indicators, movement of the US bond yields, the dollar index and crude oil prices, Meena added.
President Joe Biden and top congressional Republican Kevin McCarthy this week have reached a tentative deal to raise the federal government's $31.4 trillion debt ceiling, even as the deadline for a potentially catastrophic default was pushed back to June 5.
GDP data
On May 31, India will announce its gross domestic products growth data for the last quarter that ended in March. It is expected that India's FY23 GDP will surpass the earlier projected rate of 7 per cent. This will improve the overall outlook of the Indian economy and will have a positive impact on the markets.
Auto sales numbers
The sales numbers that will be released on June 1 will have a direct impact on the market as the traders will closely monitor this data. In the last couple of months the sales for the auto industry have seen a soft volume growth in the domestic market whereas the export market has remained weak.
PMI data
Purchasing Managers' Index (PMI) data for the manufacturing sector is scheduled to come on Thursday and it will throw light on the demand situations as factory levels for this month.
Infrastructure output
The infrastructure output data for April will be released on May 31. The foreign exchange reserves for the week that ended on May 26 and bank loan deposit growth for the fortnight ended May 19 is expected to be released on June 2.
Earnings
"As we are entering into the last leg of the earnings season, we have companies like Adani Ports, IRCTC and PFC, who will be announcing their numbers during the week," Mishra said. There are close to 1,700 companies that will announce their quarterly numbers this week but most of them are from the small-cap segment.
Ex-dividends
ITC, State Bank of India, Vedanta, IRB Infrastructure Developers, Mahindra CIE Automotive, Anand Rathi Wealth, Trident, DB Corp, Havells India, JSW Energy, Rallis India, Page Industries and Shree Cement are expected to go ex-dividend in the next week.
