Dalal Street Week Ahead: Key Factors Shaping Market Sentiment
The upcoming week on Dalal Street promises to be action-packed, driven by pivotal macroeconomic events, a slew of IPOs, and technical market movements. The positive sentiment seen recently is likely to continue, though intermittent consolidation cannot be ruled out. Here’s what to watch for in the coming days.
1. Inflation Data: US & India
Domestic CPI inflation data for November will be in sharp focus, as it plays a significant role in shaping RBI’s monetary policy. Economists expect moderation from October’s 14-month high of 6.21%, driven by easing food inflation. Globally, US inflation data for November will offer insights into the Federal Reserve’s next move, with markets expecting a 25 bps rate cut in December’s policy meeting.
2. ECB Interest Rate Decision
The European Central Bank is set to announce its interest rate decision on December 12. A 25 bps rate cut is anticipated, which could mark the fourth such cut this year. This decision comes amid slowing global growth and rising geopolitical concerns, including tariff fears from the US.
3. IPO Frenzy
The primary market is abuzz with activity, featuring five mainboard IPOs and six SME offerings. Major IPOs to watch include:
Vishal Mega Mart: ₹8,000 crore
Sai Life Sciences: ₹3,043 crore
One Mobikwik Systems: ₹572 crore
Inventurus Knowledge Solutions: ₹4,225 crore
In the SME segment, notable issues include Dhanlaxmi Crop Science, Jungle Camps India, and Yash Highvoltage.
4. Broader Economic Data
Key domestic economic indicators such as industrial and manufacturing production (October), bank loan and deposit growth (November 29 fortnight), and forex reserves (week ending December 6) are scheduled for release. Globally, GDP growth numbers from Japan and inflation data from China will be under scrutiny.
5. FII and DII Activity
Foreign Institutional Investors (FIIs) showed a positive turnaround, net buying ₹11,934 crore in December. This marked a significant recovery after heavy selling in October and November. Domestic Institutional Investors (DIIs) continued their buying streak, adding ₹1,792 crore worth of equities.
6. Oil and Currency Movements
Brent crude sustained below $72 per barrel, providing relief to equity markets. However, the Indian rupee hit a fresh low of 84.77 against the US dollar, influenced by lower growth forecasts and persistent inflation concerns. Currency volatility is expected to persist.
7. Technical Outlook
The Nifty 50 ended the week at 24,678, forming a bullish candlestick on the weekly chart. The index needs to clear the 24,700–24,800 resistance zone for further upside towards 25,000–25,200. Immediate supports are at 24,500 and 24,350.
8. F&O Trends
Options data suggests a broad range of 24,200–25,200 for the Nifty, with immediate resistance at 25,000 and support at 24,500. Call writing is evident at the 25,000 strike, while significant Put writing is concentrated at the 24,200 level.
9. India VIX – Volatility Index
India VIX continued its decline, dropping 1.98% to 14.14, providing a cushion for bullish sentiment.
10. Key Global Events
Apart from US inflation and ECB policy, watch out for US producer price index (PPI) and jobs data, as well as inflation numbers from China. These will set the tone for global market movements.
The positive momentum from last week, bolstered by RBI’s dovish stance and improved FII flows, suggests a favorable outlook. However, investors should remain vigilant about macroeconomic cues and market volatility.
Stay tuned for more updates and detailed insights at TradingThought.com