Dollar index to US retail sales: Top 5 stock market triggers to watch next week

Stock market next week: On account of Indian inflation coming down to 5-month low and US Fed’s ‘mild hawkish’ speculation on interest rate hike, Indian stock market finished on the positive note on all four trade sessions in the week gone by. NSE Nifty finished in green territory for 7th straight week, rising from the lows of 15,183 levels to 17,698 mark. On weekly basis, Nifty 50 index finished 1.73 per cent higher whereas BSE Sensex logged 1.42 per cent weekly gains and closed at 58,387 levels.

Speaking on the stock market outlook for short term, Anuj Gupta, Vice President — Research at IIFL Securities said, “India’s retail inflation, which is measured by the Consumer Price Index (CPI), eased to a 5-month low 6.71 per cent in the month of July, down from 7.01 per cent in June. Separately, India’s factory output, measured through the Index of Industrial Production (IIP), witnessed a growth of 12.3 per cent in June, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Friday. Lower crude oil prices and commodities prices are the major contributor in the recovery.”

Calling it a positive sign for Indian stock market, Anuj Gupta added, “We are expecting that Sensex may test 60000 to 61000 levels and nifty may test 18000 to 18500 levels. Index may move further up.”

“The domestic markets maintained its northward journey during the week went by and closed in green for the fourth consecutive week. The index NIFTY spot reclaimed 17700 mark after April 2022. The sentiment remained upbeat mainly on the back of positive global cues. The recovery in US markets along with FIIs becoming buyers in cash segment enforced the bulls to dominate yet again,” said Mehul Kothari, AVP — Technical Research at Anand Rathi.

Here we list out top 5 triggers that may dictate stock market next week:

1] Dollar index: “After slipping below 105 levels, dollar index has rebounded strongly forming a base around 104.50 levels. But, it has broken the previous support of 105 that augurs further weakness in the US dollar against major currencies across world, especially after ease in US inflation numbers. Any further correction in dollar index would be a positive news for Indian stock market,” said Anuj Gupta of IIFL Securities.

2] US retails sales: “US retail sales data release in FOMC meeting is expected on 17th August 2022. These data would give further insight of the US economy and hence Dalal Street investors are advised to keep an eye on this data release on 17th August next week,” Anuj Gupta said.

3] FII DII data: “FIIs have surprisingly turned buyers in August, and many expect the FII sell-off to end and buying to start coming into the markets. Of course, FII buying will depend on US inflation and other global data, but the buying patterns of FIIs will be most important to watch,” said Sonam Srivastava, Founder at Wright Research.

4] Commodity prices: “Crude oil has cooled to $92 per barrel, and the effect has been seen in easing inflation in US and India. Similarly, metal prices are low, bringing cheer to commodity consumers, but given the geo-political environment, you never know when the prices will start flaring up again. So commodity prices will be a crucial trigger to watch for,” said Sonam Srivastava.

5] Geopolitical tension: While the Ukraine-Russia conflict remains a significant cause of concern for the world, the new tensions between US-China-Taiwan have also caused worries for the market. Therefore, the progress in both geo-political crises will be a big trigger for the market.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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