New Delhi : Inflation numbers, progress of monsoon rains and key global developments, including the US Fed meeting, will lay the pitch for the stock market movement this week, say analysts. Investors are uncertain about the policy action of the US Federal Reserve in the backdrop of Chair Janet Yellen’s recent comments and the country’s jobs report data for May.
“Key global events and the progress of monsoon will dominate market sentiment in the coming week,” said Vijay Singhania, Founder-Director, Trade Smart Online.
Key macroeconomic data that are lined up are release of consumer price index (CPI) on Monday and inflation based on the wholesale price index (WPI) for May on Tuesday. Apart from these data and the trend in global markets, investors will watch in the short end how the rupee stacks up against the dollar and the oil trajectory, Singhania added. In April, consumer price inflation had risen to a three-month high of 5.39%, primarily due to a rise in food prices.
After the Reserve Bank of India, in its monetary policy, cited upside risks to inflation, the to-be-released data is crucial as it may decide the future course of action to be taken by the central bank on key interest rates.
To add to the uncertainty, the MSCI will release its annual 2016 Market Classification and questions remain whether it will add China A-shares to the indices. “A-Shares” are shares of Chinese companies which are incorporated on mainland China and traded in Shanghai or Shenzhen stock exchanges and are quoted in yuan.
According to reports, the market capitalisation of A-shares is the second highest after US stocks. Inclusion of these shares will see foreign funds shifting money from emerging markets to these shares.
Apart from the above-mentioned events, monsoon trends will also be watched for back home by investors.
Investors would also keep an eye on developments in European markets ahead of the Brexit outcome — Britain voting on its European Union membership.
On Friday, the Nifty 50 ended below the 8200-mark at 8170.05, down 33.55 points or 0.4% from the previous close, while the Sensex shed 127.71 points or 0.5% to end at 26635.75. Amid all the events, Nifty 50 is seen trading in a range of 8100-8350 points through the week.