Indian equity market encountered turbulent sessions last week following unexpected outcomes in the recently concluded 2024 Lok Sabha elections.
The National Stock Exchange (NSE) benchmark Nifty oscillated within a broad range of 21,300 to 23,300 points, marking the widest fluctuation since May 2020.
Market analysts anticipate a semblance of stability with the formation of a new government scheduled for Sunday, foreseeing potential reprieve from the recent volatility in the upcoming week.
The trajectory of the market will pivot on key domestic and global economic indicators.
Notably, analysts have slated the release of retail inflation data, which encompasses the Consumer Price Index (CPI) and the Index of Industrial Production (IIP), for June 12.
In March and April, retail inflation stood at 4.85 percent and 4.83 percent respectively.
Economists project a marginal decrease in May, estimating a rate of 4.8 percent.
Similarly, analysts anticipate a sustained downward trend in the IIP rate, which decreased to 3.9 percent in April from the previous 4.9 percent.
Internationally, 12 June 2024, heralds significant events, including the announcement of core and consumer price inflation figures in the United States.
Concurrently, the US Federal Reserve is poised to unveil its interest rate decision alongside the Federal Open Market Committee’s (FOMC) economic projections.
Analysts speculate that the Fed may maintain interest rates within the range of 5.25 to 5.50 percent, with potential rate adjustments anticipated in the latter part of the year.
Market Analysis
Moreover, analysts have slated the release of pivotal economic data from Japan, the UK, and China in the forthcoming week.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, offered insights into the market outlook, stating, “Nifty staged impressive rebounds from their respective 200-day exponential moving averages (200-DMA). Nifty is nearing its all-time high of 23,338, which acts as immediate resistance. A break above this level could propel the index towards 23,500 and even 23,800. On the downside, the 23,000-22,800 zone offers immediate support, with the crucial 20-DMA around 22,600 acting as a stronger floor.”
As the market braces for the formation of a new government and awaits crucial economic data releases, investors remain vigilant amid evolving market dynamics both domestically and globally.
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