Dalal Street Week Ahead: India PMI, BoE meeting, FIIs mood among 10 key factors to watch

1) Domestic Economic Data

On the domestic front, the street will focus on HSBC India PMI manufacturing, composite and services data for June which will be out on June 21.

2) BoE, Australia, Norway, Brazil rate cut decision

Central banks worldwide are cautious about joining the global interest-rate cutting trend. This week, key decisions from advanced economies, including the UK and Australia, are expected. Despite the Federal Reserve's recent reduction in US monetary easing projections, these central banks are likely to indicate hesitancy due to ongoing concerns about disinflation. June, originally anticipated as a month of widespread rate cuts, now appears increasingly characterized by caution among policymakers. Canada initiated rate cuts earlier in June, but the European Central Bank's recent move suggested limited enthusiasm for further easing, coupled with a higher inflation outlook. The Bank of England, facing an upcoming election and persistent price pressures, may delay rate cuts until at least August. Similarly, Australia and Norway show no urgency for cuts, while economists suggest the Swiss National Bank may hold off on further reductions following a previous move in March. Globally, monetary policies vary, with Brazil and Paraguay expected to maintain rates, while Chile may ease its rate cuts.

3) India VIX

The volatility dropped sharply for another week, making the ground supportive for bulls. If the volatility stays around these levels or extends downtrend, then that will give more comfort for bulls, going ahead. India VIX, the fear index, fell 24.05 percent during the last week to 12.82 levels, in addition to a 31.4 percent decline in the previous week. It also traded below all key moving averages now.

4) Global Economic data

Investors will watch US retail sales, Industrial production for May, initial jobless claims for the week ended June 14, S&P Global manufacturing and services PMI flash for June and existing home sales for May while UK's BoE interest rate decision next week

5) FII flows
Foreign investor activity will be closely monitored next week. After being net sellers since the beginning of May, foreign investors briefly turned buyers, purchasing over Rs 10,000 crore in Indian equities over the last five sessions. In May, they sold approximately $3 billion worth of stocks, and in June so far, about $624 million has been sold. However, experts caution that this recent buying spree may not signify a trend reversal, citing concerns over high valuations and the underperformance of large-cap stocks.

During the recent election results, foreign investors held significant short positions, indicating caution in the market. Looking ahead, there may be continued nervousness leading up to the July Budget, especially after the unexpected election outcome. Foreign investors are likely to seek clarity on policy continuity before committing to substantial new investments.

6) DII flows

Domestic institutional investors (DIIs) maintained strong inflows, purchasing approximately Rs 6,000 crore last week and totaling Rs 2.17 lakh crore so far this year. Experts believe that if the market declines, DIIs and retail investors will adopt a successful buy-on-dips strategy. Sustained flows into mutual funds, especially through SIPs, along with retail investors' readiness to buy during dips, will bolster market resilience. Investors are advised to take a medium to long-term perspective, focusing on fairly valued large-cap stocks.

7) IPO
Three mainboard IPOs worth Rs 1,087 crore and six SME IPOs worth Rs 154 crore will launch next week. The DEE Development IPO, valued at Rs 418 crore, will be open for subscription from June 19 to June 21. The price band is set at Rs 193-203 per share, with a fresh issue size of Rs 325 crore and an Offer for Sale (OFS) size of Rs 93 crore. Akme Fintrade India's IPO, amounting to Rs 121 crore, will also open on June 19 and close on June 21. Lastly, the Stanley Lifestyles IPO, valued at Rs 369 crore, is scheduled to open on June 21 and close on June 25.

Among SME IPOs, Falcon Technoprojects India, Durlax Top Surface, and GEM Enviro Management will open on June 19 and close on June 21. Winny Immigration and Education, and Dindigul Farm Products will open on June 20 and close on June 24. Medicamen Organics' SME IPO will open on June 21 and close on June 25.

8) Technical View
Technically, the Nifty 50 traded above the upper end of Rising Channel, and also above all key moving averages. Further, it continued higher highs, higher lows formation for fourth consecutive week, with positive bias in momentum indicators RSI and MACD.The index is near its crucial resistance of 23,500 and if the said levels get broken then the march towards 23,800 and 24,000 is likely in the coming sessions, with crucial support at 23,000, but if it fails to surpass and sustain above 23,500 then consolidation is expected to be seen, experts said.

9) F&O Cues
The weekly options data indicated that the Nifty may face immediate resistance at 23,500, with immediate support at 23,300 and then crucial support at 23,000.On the Call side, the maximum open interest was seen at 24,000 strike, followed by 23,500 and 23,400 strikes, with maximum writing at 24,000 strike, and then 23,500 and 23,800 strikes. On the Put side, 23,400 strike holds the maximum open interest, followed by 23,000 and 22,500 strikes, with maximum writing at 23,400 and then 23,300 and 23,000 strikes.

10) Corporate Action

Here are key corporate actions to take place next week:

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