Market outlook: Rupee movement, inflows of funds to guide Indices

Aiming to retain their psychologically- significant levels, key Indian equity indices will seek direction from the movement of the rupee, influx of foreign funds and global macro-economic data during the trade week starting March 20.

"With no major domestic triggers or events in the coming week, investors should continue to keep an eye on global events and fresh investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), as well as the movement of the rupee against the US dollar in the near term," Vijay Singhania, Founder and Director of brokerage firm Trade Smart Online, told IANS.

The Indian rupee strengthened by 1.15 paise in the week gone by to Rs. 65.46 against the US dollar.

Provisional figures from the stock exchanges showed that the FIIs purchased stocks worth Rs 8,121.51 crore, while domestic institutional investors (DIIs) divested scrip worth Rs 2,192.86 crore in the last week.

Figures from the National Securities Depository Limited (NSDL) showed that foreign portfolio investors (FPIs) bought equities worth Rs 7,495.85 crore, or $1.13 billion, during March 14-17.

Market observers cited that the tone for the week ahead will be set by the release of some major global macro-economic data.

"Key global macro-economic data in the coming week includes China`s CB (Conference Board) Leading Economic Index for February 2017, scheduled to release on Tuesday. The minutes of the Bank of Japan`s monetary policy meeting will be out on the same day," Singhania said.

Apart from that, other global macro-data slated for next week include the US initial jobless claims for the week ended March 17, and the Eurozone Markit PMI (Purchasing Managers` Index) Composite data for March 2017.

Market experts opined that the markets may witness some profit- booking during the upcoming week.

"Indian equity markets are likely to trade with volatility due to profit booking at higher levels in the coming sessions. Sector-specific price movement can be seen in the markets next week," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

On a similar note, Rakesh Tarway, Head of Research, Reliance Securities, asserted: "We continue to maintain a positive bias on markets, but there is a likelihood of some amount of consolidation at current levels after a sharp run up across indices."

On the technical levels, Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS: "The Nifty remains in an intermediate uptrend with no signs of reversal yet as it enters the thirteenth week of uptrend. Further upsides are likely once the immediate resistance of 9,214 is taken out." "Weakness could emerge if the support of 9,060 is broken."

Riding on the outcome of the assembly elections and a strong rupee, the equity indices had zoomed to new 52-week highs and crossed their psychologically-significant levels during last week.

The benchmark NSE Nifty hit a record intra-day high of 9,218.40 points and closed above the 9,100-mark for the first time during the truncated week ended Friday. Similarly, the Sensex touched a new 52 week-high of 29,824.62 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE surged by 702.76 points or 2.43% to close at 29,648.99 points, while the NSE Nifty was up by 225.5 points or 2.52% at 9,160.05 points.