The coming week is going to be crucial as investors will be watching for Gross Domestic Product (GDP) growth rate data for Q2FY23 to be out on November 30 for further cues on the country’s economic situation.
India’s economy grew by 13.5 per cent in the April-June period (first quarter) of FY23. On the same day, Infrastructure Output data will be released. The market will see a lot of data pouring in with monthly sales numbers of auto companies.
On the economy front, traders will first be reacting to the core sector data for the month of October and will also be eyeing S&P Global Manufacturing PMI for November to be announced on December 1. Moreover, market participants will keep eye on the legislative assembly election, which is scheduled to be held in Gujarat on December 1 and 5.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “FPI investment is showing a distinctly positive trend in November. FPIs (Foreign Portfolio Investors) have been buyers in financial services, IT, autos, and capital goods. As per NSDL data FPIs have bought equity worth Rs 31630 crore till November 25th. FPIs are unlikely to be major sellers, going forward since their earlier policy of continuous selling in banking has cost them heavily.”
“When FPIs were sellers earlier, DIIs (Domestic Institutional Investors) were buyers and they gained from the FPI policy of sustained selling. (total FPI selling in equity in 2022 is Rs 137166 crore till November 25th) since the dollar was continuously rising. Now the market construct in the US has changed to rising equity, falling yields, and a falling dollar. This is favourable for the continuation of FPI flows, going forward,” he added.
On the global front, investors would be eyeing a few economic data from the world’s largest economy, the United States (US) the Dallas Fed Manufacturing Index on November 28, followed by Redbook and House Price Index, on November 29, GDP Growth Rate, Goods Trade Balance, Chicago PMI and EIA Crude Oil Stocks Change on November 30, Personal Income, Initial Jobless Claims and S&P Global Manufacturing PMI on December 1, Unemployment Rate and Baker Hughes Total Rig Count on December 2.
Vinod Nair, Head of Research at Geojit Financial Services, said: “Bulls dominated Dalal Street, with the indices parked near record highs, supported by favourable triggers like FII buying, a drop in crude prices, a falling dollar index, and declining bond yields. The FOMC meeting minutes hinted that the rate hike cycle may be slowing down. Crude oil prices dropped over talks of a possible price cap on Russian oil and a rise in US product stockpiles.”
“However, the tight COVID lockdown in China has negatively impacted the global growth forecast. Going ahead, the lack of strong fundamental triggers will limit the upside, keeping the market volatile in the short term. The Fed Chair’s speech, which is scheduled for next week, and the release of other significant macroeconomic data will influence the market’s future trajectory,” he said.
Rupak De, senior technical analyst at LKP Securities, said: “The index has posted a muted close after a sideward trading session. On the daily chart, the Nifty has reached the rising trend line found by joining the preceding peaks. The momentum indicator has reached the falling trendline on the daily timeframe. Based on the price chart and momentum indicator setup we can infer that the index is on the verge of strong directional movement over the short term. On the lower end, a fall below 18,450 may trigger a correction towards 18,100-18,000; whereas, on the higher end, a rise above 18,605 may induce a decent rally in the market.”
