Sensex, Nifty: Bank deposits growth, FII investment trend, US data – Key factors that may influence Dalal Street next week
In the coming week, market participants will be eyeing Monetary Policy Meeting Minutes to be released on February 22 for more cues. Traders will be looking for the Foreign Exchange Reserves data to be out on February 24. Foreign Exchange Reserves in India recorded at $566.948 billion in the week ended February 10, 2023. Besides, on February 24, investors will also be watching for the Bank deposit growth, bank loan growth data. Also, the first meeting of the G20 Finance Ministers and Central Bank Governors is scheduled to be held on February 24-25 in Bengaluru. In the last leg of the result season, a few companies will report their results in the coming week – Sharad Fibres, Elantas Beck, Mahindra CIE, KSB Pumps, and Sanofi India.
Dr. Joseph Thomas, Head of Research at Emkay Wealth Management, said: “The equity market continues to test support levels influenced by the developments abroad, mainly the US, and inordinately led by data points on inflation. The persistence of inflation points to a status quo on the policy stance, and this is affecting markets due to an assessment of growth prospects that is not entirely favourable. The very same factors are likely to guide the markets movements in the coming weeks too.”
US market data
On the global front, the coming week will be a holiday-shortened as the US markets will remain closed on February 20 on account of Washington’s Birthday. On the economic data front, investors will be eyeing S&P Global Manufacturing PMI Flash, S&P Global Services PMI Flash, Existing Home Sales on February 21, followed by Redbook on February 22, FOMC Minutes, API Crude Oil Stock, GDP Growth Rate, EIA Crude Oil Stocks on February 23, Core PCE Price Index, New Home Sales, Baker Hughes Oil Rig Count on February 24.
Foreign Investment trend
On the Foreign investor’s movement Dr.V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The distinctive feature of stock market performance this year, so far, is India’s underperformance with Nifty down by 1.4% YTD. In contrast, the Taiwan index is up by 8.3 % and the Shanghai composite is up by 3.4%. The principal reason for this variation in performance is the FPI outflows from India and inflows into other emerging markets like China, Taiwan, Hong Hong, and South Korea. Outflows from India have been triggered mainly by the high valuations in India and inflows into other markets have been triggered by their relatively cheaper valuations.”
“The opening up of the Chinese economy and improving prospects there has played an important role in the massive flows to China. An important recent trend is that FPI selling has reduced significantly and FPIs have even turned buyers in some recent days. It appears that the sustained selling in India witnessed from early January is over, but they might sell again at higher levels. FPIs have been buyers in autos and auto components and construction. They were sellers in banking and financial services in which they are sitting on good profits”. He added.
Nifty Technical Outlook
Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said: “After showing weakness from the highs on Thursday, Nifty continued with follow-through decline amidst range movement on Friday and closed the day lower by 91 points. After opening on a negative note, the market attempted an upside recovery from the intraday lows in the early part of the session. It slipped into weakness from the highs and the negative trend with choppy movement continued till the end.”
“The short-term trend of Nifty is choppy with weak bias. The present weakness has not damaged the near-term uptrend status of the market so far and we expect chances of buying emerging from near the lower support of around 17800 levels in the coming week. On the higher side, the area of 18150 could act as a resistance.” He concluded.
