The Indian stock market has recently achieved its longest winning streak of 2023, showcasing remarkable gains propelled by key index heavyweights, steady foreign investments, and a renewed sense of optimism surrounding the India-US trade agreement. However, profit-taking activities emerged amid rising geopolitical tensions following the recent Pahalgam terror incident involving India and Pakistan. As we look ahead, several significant market triggers are set to shape investor sentiment in the upcoming week.
Indian Stock Market Performance
The domestic equity indices, Sensex and Nifty 50, have experienced a positive trend for three consecutive weeks, with both indices posting over a 1% increase. Specifically, the Nifty 50 surged by 307.35 points (1.28%) to close at 24,346.70, while the BSE Sensex climbed 1,289.46 points (1.62%) to finish at 80,501.99.
Key reasons behind this upward momentum include:
- Strong foreign fund inflows.
- Robust corporate earnings reports.
- Easing trade tensions between the US and China.
- Supportive policies from the Reserve Bank of India amid moderating inflation.
Puneet Singhania, Director at Master Trust Group, noted that a combination of strong fundamentals and positive technical indicators has kept market sentiment robust.
Upcoming Market Triggers
Investors will be keenly observing several key events next week, which could significantly influence market trends:
- Quarterly Earnings Reports: Major corporations like M&M, Coal India, and Asian Paints are set to release their financial results.
- US Federal Reserve’s Decision: The Fed is expected to maintain interest rates within the 4.25% to 4.50% range. Any hints toward future cuts will be closely monitored.
- Geopolitical Developments: Ongoing tensions between India and Pakistan will remain a concern, particularly following recent attacks.
Foreign Institutional Investment Insights
Foreign Institutional Investors (FIIs) have continued their buying spree, injecting nearly ₹7,680 crore into the cash segment, while Domestic Institutional Investors (DIIs) contributed around ₹9,269.47 crore. This marks a significant shift from the previous three months, where FIIs were net sellers. According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, the shift in FII strategy is driven by:
- A 90-day tariff pause announcement by former President Trump, leading to a recovery in global equity markets.
- A decline in the US dollar index, encouraging investments in emerging markets like India.
Anticipated IPO Action
While no new mainboard IPOs are scheduled for the coming week, the SME segment will see two new issues opening for bidding. Additionally, shares of Ather Energy will be listed on both the BSE and NSE on May 6.
Global Economic Factors
Next week will also bring crucial global economic signals, particularly from the US Federal Reserve, which is set to discuss interest rate policies. The potential for easing trade tensions between the US and China, combined with a weakening dollar, could serve as a positive backdrop for Indian markets.
Technical Outlook
For the Nifty 50, maintaining the 23,800 level will be vital to sustain its bullish trend. A slip below this threshold could prompt profit-taking, with significant support anticipated near the 23,400 mark, where key moving averages are aligned.
As the week unfolds, investors will be closely monitoring these developments to navigate the complexities of the market effectively. Stay tuned for updates on both domestic and global fronts as they unfold.
