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Inflation data, Fed rate decision, rupee movement to keep market volatile this week: Experts

As long as Nifty does not fall below 15,900, there is a significant chance that it can test 16,800 levels. We recommend traders to keep a neutral view for the coming week and avoid aggressive trades on either side, says Yesha Shah, Head of Equity Research, Samco Securities

June 13, 2022 / 07:49 AM IST
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It was a crazy Friday for Indian markets on June 10 as fear of stagflation in the global economy dented investor sentiment resulting in a nearly 2 percent drop in the benchmark indices. At close, the 30-pack BSE Sensex stood at 54,303, down 1,017 points or 1.84 percent, while the Nifty ended the day with a loss of 276.3 points or 1.68 percent at 16,2018.
Ajit Mishra, VP - Research, Religare Broking | We expect volatility to remain high next week as well citing the list of important data and events. Participants will first react to the US Inflation, hitting a new 40-year high and also to the IIP data, which came in after the market hours on Friday. Going ahead, we have CPI and WPI inflation scheduled on June 13 and June 14 respectively. On the global front, the outcome of the US Fed meet will be out on June 15. Markets are again reeling under tremendous pressure across the globe citing sticky inflation which could prompt swift actions by the apex banks ahead. Indications are pointing towards the prevailing negativity to continue however bargain hunting in select index heavyweights could cap the damage. We expect Nifty to find support around 15,650-15,900 levels while the 16,500 and 16,800 levels would act as strong hurdles in case of any rebound. Despite the prevailing negativity, stocks from the auto and oil & gas space are doing well and are likely to maintain the bias. On the other hand, metals and PSU banks may offer fresh opportunities to create shorts. We advise aligning positions accordingly and suggest preferring hedged bets.
Ajit Mishra, VP - Research, Religare Broking | We expect volatility to remain high next week as well, based on a list of important data and events. Participants will first react to the US inflation hitting a new 40-year high and also to the IIP data, which came in after the market hours on Friday. Going ahead, we have CPI and WPI inflation scheduled on June 13 and June 14. On the global front, the outcome of the US Fed meet will be out on June 15. Markets are again reeling under tremendous pressure across the globe because of sticky inflation which could prompt swift actions by the apex banks ahead. Indications show that the prevailing negativity will continue, however, bargain hunting in select index heavyweights could cap the damage. We expect Nifty to find support around 15,650-15,900 levels while the 16,500 and 16,800 levels would act as strong hurdles in case of any rebound. Despite the prevailing negativity, stocks from the auto and oil and gas space are doing well and are likely to maintain the bias. On the other hand, metals and PSU banks may offer fresh opportunities to create shorts. We advise aligning positions accordingly and suggest preferring hedged bets.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Investors would also look forward to upcoming FED meeting scheduled next week 14-15th June. On the domestic side depreciating rupee, high crude oil prices and consistent FIIs selling remain key negatives. Market is stuck in a broader range for last one month, which is expected to continue until any clear direction emerges on either side. While declines are being bought into – support is missing at higher levels. We expect limited stock and sector specific action. Energy, Auto, Auto Ancillary, Select Banks, retail, QSR and Defence sectors are likely to be in focus.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Investors would also look forward to upcoming Fed meeting scheduled on June 14 and 15. On the domestic side, a depreciating rupee, high crude oil prices and consistent FII selling remain key negatives. The market is stuck in a broader range for the last one month, which is expected to continue until any clear direction emerges on either side. While declines are being bought into, support is missing at higher levels. We expect limited stock and sector-specific action. Energy, auto, auto ancillary, select banks, retail, QSR and defence sectors are likely to be in focus.
Yesha Shah, Head of Equity Research, Samco Securities | The benchmark appears to be moving towards the support zone between 15,900 and 16,100. Despite the fact that this week's trading patterns suggest additional downside, the overall bearish momentum has moderated as Nifty is currently trading above the falling resistance line. As long as Nifty does not fall below 15,900, there is a significant chance that it can test 16,800 levels. We recommend traders keep a neutral view for the coming week and avoid aggressive trades on either side. Globally, Fed's interest rate decision as well as the volatility in crude price will keep market anxious. Back home, the CPI and WPI inflation print will be the main headliner next week. Markets participants will keenly analyze whether the import duty restrictions and rate hikes have had a positive impact on the inflation numbers. Furthermore, statistics on India's trade balance will be closely monitored as this statistic clocked a record high in May 2022. The movement of rupee against the dollar will also be kept an eye on. Amid increasing macro uncertainties, investors are advised to exercise extreme caution till markets decisively find their direction.
Yesha Shah, Head of Equity Research, Samco Securities | The benchmark appears to be moving towards the support zone between 15,900 and 16,100. Despite the fact that this week's trading patterns suggest additional downside, the overall bearish momentum has moderated as the Nifty trades above the falling resistance line. As long as the Nifty does not fall below 15,900, there is a significant chance that it can test 16,800 levels. We recommend traders keep a neutral view for the coming week and avoid aggressive trades on either side. Globally, Fed's interest rate decision as well as the volatility in crude price will keep the market anxious. Back home, the CPI and WPI inflation print will be the main headliner next week. Markets participants will keenly analyse whether the import duty restrictions and rate hikes have had a positive impact on the inflation numbers. Statistics on India's trade balance will also be closely monitored as it clocked a record high in May. The movement of the rupee against the dollar will also be watched. Amid increasing macro uncertainties, investors are advised to exercise extreme caution till market decisively find its direction.
Joseph Thomas, Head of Research, Emkay Wealth Management | The Fed meeting next week, the results of which will be known to by June 14th evening, is also a major event the market is looking forward to, and most analysts expect a hike of 50 bps in the base rate by the Fed. It may also be mentioned here that the number of covid positive cases is rapidly rising in India and the steady rise in cases may prove to be a dampener for the sentiment. While the FII exit from the local market continued unabated, the RBI policy announced this week put the focus on normalization of liquidity and withdrawal of accommodative policy both of which may have a negative impact on the markets in the coming weeks.
Joseph Thomas, Head of Research, Emkay Wealth Management | The Fed meeting next week, the results of which will be known to by June 14 evening is also a major event the market is looking forward to, and most analysts expect a hike of 50 bps in the base rate by the Fed. It may also be mentioned here that the number of Covid cases is rising rapidly in India and it may prove to be a dampener for the sentiment. While the FII exit from the local market continued unabated, the RBI policy announced this week put the focus on normalisation of liquidity and withdrawal of accommodative policy both of which may have a negative impact on the markets in the coming weeks.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | The market is unable to show any kind of strength at higher levels; but despite this, we are still not getting convinced with the weakness. We would rather reassess the situation in the first half of the forthcoming week and all eyes on crucial levels like 16000 on the lower side and 16400 on the upside. The pragmatic strategy would be to stay light on positions and stock specific also, we are seeing a lot of whipsaws on either side. In fact, it has become a nightmare in trading stocks in the last couple of weeks. Let’s see how things pan out going ahead and we are still hopeful of some recovery in the coming days. If this has to happen, US markets need to provide that much-needed relief.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | The market is unable to show any kind of strength at higher levels. We are still not getting convinced with the weakness. We would rather reassess the situation in the first half of the forthcoming week and all eyes on crucial levels like 16,000 on the lower side and 16,400 on the upside. The pragmatic strategy would be to stay light on positions and stock specific also, we are seeing a lot of whipsaws on either side. In fact, it has become a nightmare in trading stocks in the last couple of weeks. Let’s see how things pan out going ahead and we are still hopeful of some recovery in the coming days. If this has to happen, US markets need to provide that much-needed relief.
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first published: Jun 13, 2022 07:49 am
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