Indian inflation data to fourth covid wave with five triggers for the market

The Indian stock market has fallen in five of the last six days as a result of negative global cues. Following a three-week winning streak, the Nifty 50 index fell 2.31 percent last week. Volumes on the NSE remained modest, as they had been over the previous three to four sessions. On Friday, world stocks fell to a two-week low as fears about global growth were fueled by the European Central Bank’s rate hike forecast and jitters about incoming US inflation data.

Fitch Ratings has upgraded India’s outlook from negative to stable, while maintaining the BBB- rating. “The Outlook revision reflects our view that downside risks to medium-term growth have diminished due to India’s rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock,” Fitch said in a statement on June 10.

Nagaraj Shetti, Technical Research Analyst at HDFC Securities said, “A long negative candle was formed on the daily chart and that moved below the support of 16,200 levels. Now, the supports have started to break down one after another and the market seems to have picked up downside momentum on Friday.”

Traders and investors are encouraged to remain cautious about each and every trigger, according to stock market analysts, as the market has yet to reach its bottom, and volatility in the equities market may continue this week as well.

Here are the top 5 triggers that could influence the stock market this week:

Fourth Covid wave: In India, reports of new Covid 19 cases have been on the rise for the past several days. The number of new Covid cases in India increased dramatically last week, reaching 36,267 on Friday 2022. If the number of new Covid cases in India increases dramatically, FIIs’ selling may accelerate, resulting in a significant sell-off on Dalal Street,” said Jitendra Upadhyay, Sr. Equity Research Analyst at Bonanza Wealth Management.

Indian inflation data: The global markets will be paying great attention to India’s inflation data, which will be released on Monday this week. There are fears of stagflation in the global economy. Inflation targeting has been in the priority of the Federal banks worldwide. Equity and Debt Markets will closely watch commodity prices, inflation data and GDP growth projections from major economies” Green Portfolio, a SEBI-registered portfolio management service provider, is led by Divam Sharma.

US Fed Meeting: “The markets and FPI activity will be affected by US wholesale inflation statistics and the Fed’s interest rate decision, which will include a speech from the Fed Chair. Interest rates are expected to rise 50 basis points in June, according to the markets “Green Portfolio’s Divam Sharma stated.

Dollar vs. Rupee: “As a result of the global risk-off mood, the geopolitical scenario has heightened concerns about inflation and monetary policy tightening around the world. The rupee has weakened as a result of the loss of foreign funds, which has worsened the market. This has resulted in more than USD 20 billion in outflows from the Indian market since October 21, putting pressure on the rupee “Bonanza Wealth Management’s Jitendra Upadhyay expressed his opinion.

Data on Chinese and European industrial production: Stock market investors and traders should keep an eye on Chinese and European industrial production data due next week. A negative result in these data could fuel conjecture about a worldwide economic slowdown.

“Tightening of interest rate has directed to short-term disruptions in the equity markets and spiked volatility. In addition, a slowdown in rural demand and rising inflation (led by crude and supply-chain disruptions) are near-term worries,” said Jitendra Upadhyay.