Market Outlook: 5 Factors That May Drive Equity Indices Next Week

Indian rupee's movement against US dollar, direction of foreign fund flows for further cues, crude oil price fluctuations and stride of monsoon's progress are likely to set the tone of key domestic equity indices- S&P Bombay Stock Exchange (BSE) Sensex and the Nifty 50 in the coming week. According to market analysts, OPEC (Organisation of the Petroleum Exporting Countries) meeting on oil supply and the escalating trade war tensions between US and China may also drive the trajectory of key equity indices next week. 5 things that may impact the markets next week: 1. Figures from the National Securities Depository (NSDL) showed that foreign portfolio investors (FPIs) divested equities worth Rs 3,071.85 crore in the week ended June 15. In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 5,294 crore, while the domestic institutional investors (DIIs) purchased stocks worth Rs 4,014.25 crore in the same week. These directions will also impact the market in the coming week. 2. The stock markets next week will also look forward to the outcome of the OPEC meeting on oil supply. "Oil prices have already moved lower in anticipation. This would help Indian rupee and local bond yield", said Devendra Nevgi, Founder and Principal Partner, Delta Global Partners as reported by IANS. 3. US-China trade war fears may lead concerns on stock markets in the week ahead. "The trade war tensions have further aggravated between the US and China and US dollar appreciation can dampen the EM (emerging market) sentiment. India has also now been drawn into the trade war bandwagon with retaliatory tariffs on the US imports", added Mr Nevgi. 4. According to Geojit Financial Services Head of Research Vinod Nair: "Global central banks are on a path to tighter monetary policy which has been outlined in US FED and ECB (European Central Bank) policy meets. This is expected to hurt emerging market inflows." 5. The movement of Indian rupee against the US dollar may also set the course for the key indices. Rupee closed at 68.02 against the US dollar. "Indian rupee is unable to benefit from the decline in oil prices, hawkish US Fed continues to drive the dollar higher," said Anindya Banerjee, Deputy Vice President , Currency and Interest Rates with Kotak Securities. Last week, both the key Indian equity indices rose for the fourth consecutive week. BSE Sensex rose by 178.47 points or 0.50 per cent to close at 35,622.14 points on a weekly basis. NSE Nifty closed the week's trade at 10,817.70 points. "We saw lot of events including RBI policy, Fed meet and Singapore summit last week. While outcome of Singapore summit was positive, RBI as well as US Fed went ahead with interest rates hikes to take care of rising inflation. CAD (Current account deficit) rose for the previous quarter owing to rising oil prices", said Anita Gandhi, Whole Time Director, Arihant Capital Market. "However, the sentiment was improved with announcement of buy back by TCS and it improved overall sentiment for the technology sector. FPIs continued to be net sellers in Indian markets and going forward rising inflation & weakening rupee are posing concern for Indian Equities", she further added. (With inputs from Agencies)

Market Outlook: 5 Factors That May Drive Equity Indices Next Week

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