Market week ahead: Retail inflation data, global cues key factors to look for

In the domestic equity markets this week, trading activity will be largely driven by inflation data, trends in global markets, and foreign fund movement said analysts, adding that the participants will also monitor developments related to the Adani Group crisis, according to news agency PTI. 

Santosh Meena, Head of Research at Swastika Investmart Ltd said, “…the movement of crude oil, the dollar index, and US bond yields will be other important factors. The institutional flow will be important as FIIs’ selling has come down after relentless selling in January.”

Foreign Institutional Investors (FIIs) offloaded equities worth a net ₹144.73 crore last week. This week, the market will be awaiting key inflation data from the US and India for clues on the rate hike trajectory of central banks.

Retail inflation data for both the US and India is scheduled to be announced on Tuesday. Last week, the Reserve Bank of India (RBI) hiked the key benchmark policy rate by 25 basis points to 6.5 percent, citing sticky core inflation.

Vinod Nair, Head of Research at Geojit Financial Services said, “The RBI’s monetary policy committee (MPC) meeting delivered a smaller rate hike in line with market expectations, which was positively welcomed by investors. They have taken a more optimistic view on domestic growth by increasing the GDP forecast while cautiously keeping CPI inflation at 5.3 percent for FY24.”

During such shaky times, investors need to adopt value buying as a strategy. Due to a decrease in valuation near long-term averages, small-cap companies are looking appealing over the long term, Nair added as quoted by PTI. 

Apart, companies such as Adani Enterprises, Grasim, Eicher Motors, SAIL, among others, will announce their quarterly results during the week. Last week, the 30-share BSE Sensex benchmark declined 159.18 points or 0.26 per cent to close at 60,682.70.

Domestic indices ended the week along the flatline with a negative undertone as the market sentiments were hammered by the prospects of policy tightening by the Federal Reserve as a strong job market in the US offers more leeway in enacting stricter policy measures, Nair added.

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