US Dollar Q2 GDP data: Top 5 triggers that could dictate the stock market this week

Scholarship this week: On the back of strong global indices, short hedging by FIIs and a rally in bank stocks on Dalal Street, the Indian stock market ended in positive territory for the sixth session in a row. The Nifty 50 index gained 4.17% while BSE Sensex jumped 4.30% over the past week. After a long wave of selling, FII remained net buyers in four out of five sessions last week.

“Over the past week, we did not expect a one-sided market move and expected the rally to end near 16,450 in the index’s NIFTY spot. positive global signals and short hedging by FII in index futures,” said Mehul Kothari, AVP – Technical Research at Anand Rathi.

“It’s been a great week for the markets as they have gained in all 5 sessions. Over the past month, mid and small caps have gained more than 10%. Due to the cooling in commodity prices, commodities consumer goods and autos have recovered, and there are early signs of rural demand picking up. But next week may not be entirely positive as the US Fed meets next week for its policy decisions, and a another rate hike could spook the markets,” said Sonam Srivastava, founder of Wright Research.

Here we list the top 5 triggers that could impact Indian equity markets this week:

1]US Fed meeting: “Because of the US central bank’s hawkish stance, the market is expecting a big rate hike announcement at the US Federal Reserve’s monetary policy meeting. This should set the tone for future financial markets as it could trigger FII selling again because US bond yield is expected to attract more money than the stock market in such a scenario,” said Anuj Gupta, VP of Research at IIFL Securities. that the dollar index had eased over the past week and that the US Fed’s interest rate hike could again fuel demand for the US dollar as an “investor” causing the US dollar to rise sharply US dollar (USD) against major currencies including Indian National Rupee (INR).

2]Q2 US GDP data: “The United States Gross Domestic Product (GDP) numbers for the second quarter arrive on July 28, 2022 and the world is eagerly awaiting this release. This data should paint an ideal picture of the US economy and will set the tone for global economy Stock markets including Dalal St. Positive Q2 GDP numbers could trigger a rally in the Nasdaq, which is being closely watched by Indian IT stocks As the Nasdaq tracks employment data in the US and FDP figures, any positive news on the GDP front from the US government could trigger a trend reversal in Indian IT stocks,” said Anuj Gupta of IIFL Securities.

3] Nasdaq Index: “We must remain vigilant on the results of 5 large Nasdaq-listed technology companies – Microsoft, Google, Meta Platforms, Apple and Amazon. These companies will announce their quarterly results next week. An announcement of positive quarterly results by these giants of the tech could lead to an extension of the Nasdaq rally that started last week.Other than that, Nasdaq is tracking US employment and GDP data and second quarter US GDP is coming July 28 next week .Thus, Indian bulls awaiting a trend reversal in Indian IT stocks are advised to stay glued to these triggers linked to the Nasdaq index,” Anuj Gupta said.

4]Business results: “Next week we will see over 200 companies releasing their results. These include HDFC, TATAMOTORS, ITC, LT, ASIAN PAINT and BAJFINANCE, among many other big names. The figures released, along with management commentary, will be critical for the direction of the market,” said Sonam Srivastava.

5]Price of raw materials: “Crude oil has cooled to $96 a barrel, and many are cheering it on as a signal of slowing inflation. but given the inflationary environment, you never know when the prices will start to soar again, so commodity prices will be a crucial trigger to watch,” said Sonam Srivastava.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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