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HomeNewsWeekly newsWeek Ahead Analysis: US, India Inflation, FOMC Minutes Shape Dalal Street's Outlook.

Week Ahead Analysis: US, India Inflation, FOMC Minutes Shape Dalal Street’s Outlook.

Week Ahead:- The broad market’s buoyancy suggests short-term strength, while robust US economic data raises doubts about the expected Fed rate cut in June.

The Indian market is expected to see slight positive movement in the coming week due to events such as TCS’ Q4FY24 results, US Fed minutes, and inflation figures.

The Nifty 50 reached an all-time high and the BSE Sensex rose by 0.81 percent. The Monetary Policy Committee remained cautious about climate shocks, while positive manufacturing PMI data and optimism about Q4 results suggest short-term strength.

Key factors for upcoming week

Fourth quarter results

Six firms will report Q4FY24 earnings this week. TCS, Cupid, Anand Rathi Wealth, Krystal Integrated Services, Popular Vehicles and Services, and Teamo Productions HQ.

CPI

CPI statistics for India will be issued on March 12. Barclays Regional Economist Shreya Sodhani expects CPI inflation to fall to 4.7 percent in March due to falling food and fuel costs and core inflation slowing.

“Food, fuel, and core item momentum eased, but base effects also supported disinflation. Sodhani estimates that headline CPI declined 0.12% MoM due to reduced vegetable, LPG, and gasoline costs. On April 12, CPI, February industrial output, and foreign currency reserves for the week ended April 5 will be revealed.

US inflation, FOMC minutes

The US will report inflation on April 10. The FOMC maintained the federal funds interest rate at 5.25–5.5 percent at its latest meeting. The US Federal Reserve (the Fed) has maintained a 22-year high interest rate goal since July 2023 to battle inflation.

Global economic data
Market players will also watch the European Central Bank interest rate announcement next week. US employment, China inflation, and US, China, and Japan producer price index reports will also keep the street busy.

Oil prices

Brent increased more than $1 per barrel to $91.17 per barrel. US WTI finished at $86.91. Both benchmarks rose more than 4% last week after Iran pledged retaliation for an attack on Israel. Geopolitical tensions may affect global supply chains, causing commodity price surges, notably crude oil, warned Prabhudas Lilladher Head, Advisory, Vikram Kasat.

Primary market: Bharti Hexacom will list on bourses on April 12. The share price was Rs 570 and the business sought Rs 4,275 crore. The SME IPOs of DGG Wires and Cables and Teerth Gopicon will start on April 8 and end on April 10. K2 Infragen, Jay Kalash Namkeen, and Yash Optics & Lens list April 8.

The technical view

The Nifty 50 closed at a new high and established a small-bodied bullish candlestick pattern with extended upper and lower shadows on the weekly charts, continuing higher high, higher low forms for another week.

In the coming week, the Nifty may remain rangebound unless it breaks 22,600 or 22,300-22,200. Experts say either breach can steer the market.

“Traders should buy on dips until Nifty breaks 22,200,” recommended Religare Broking SVP, Technical Research Ajit Mishra.

He thought it may reach 22,700-22,850 on the upside.

F&O signals

Weekly options data showed that 22,500 is critical for the Nifty 50, with 22,800 as resistance and 22,400 as immediate support.

Most open interest was at 23,000 strike, followed by 23,500 strike and 22,800 strike, with considerable Call writing at 22,800 strike, 23,000 strike, and 23,500 strike. On the Put side, the 22,500 strike had the most open interest, followed by 21,500 and 22,400 strikes, with the most writing at 22,400.

Indian VIX

Bulls were comfortable as volatility tested November 2023 lows. India VIX, the fear indicator, fell 11.65% to 11.34 this week.

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