The domestic benchmark indices Sensex and Nifty are likely to be led by macroeconomic data announcements, global trends, and trading activity of foreign investors this week as per analysts.

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After a record rally, markets may face volatile trends this week amid elevated valuations and investors would also keep track of global oil benchmark Brent crude and rupee-dollar movement for further cues.

"Potential volatility in the stock market is anticipated this week. Elevated valuations remain a concern, with investors now focusing on monsoon progress and its impact on the rural economy. The upcoming Union Budget in July has become the next focal point, with high expectations for growth-oriented policies," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

Market sentiment will be gauged by closely monitoring foreign and domestic institutional investors' activity (FII and DII) and crude oil prices, he said.

On the global front, the rise in US jobless claims and weak housing data have raised expectations of a rate cut in September as per Vinod Nair, Head of Research, Geojit Financial Services. 

"For the week ahead, the focus will be on the release of US & Indian manufacturing PMI data and the FED Chair’s speech. The undercurrent is positive, with no major risk visible for the domestic market in the short term. All eyes will be on the union budget proposals which will dictate the market in the medium term,” said Nair. 

Last week, the BSE benchmark jumped 1,822.83 points or 2.36 per cent, and the Nifty climbed 509.5 points or 2.16 per cent.

The Sensex recorded the best monthly gain in June by climbing 7.14 per cent.

The Sensex breached the historic 79,000 mark on Thursday, and the Nifty hit the 24,000 level for the first time in intra-day trade.

"The outlook for the market will be guided by major domestic and global economic data such as HSBC India Manufacturing PMI, HSBC India Services PMI, S&P Global Manufacturing PMI, Fed speech, initial jobless claims this week," Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd, said.

After hitting a fresh all-time high level in early trade on Friday, the BSE 30-share index declined 210.45 points or 0.27 per cent to settle at 79,032.73. During the day, it jumped 428.4 points or 0.54 per cent to hit a record peak of 79,671.58.

The Nifty went lower by 33.90 points or 0.14 per cent to 24,010.60. During the day, it climbed 129.5 points or 0.53 per cent to hit a new lifetime high of 24,174.

"We expect this positive momentum to continue at a steady pace with stock-specific action. However, the release of economic data points this week would keep a little volatility in the market. Sector like auto is expected to be in the limelight with release of their monthly sales number," said Siddhartha Khemka, Senior Group VP, Head - Research, Broking & Distribution, Motilal Oswal Financial Services Ltd.

As the new month begins, market participants will closely watch auto sales data to start with, said Ajit Mishra – SVP, Research, Religare Broking Ltd.

"Besides, progress of monsoon will also be in focus. Global cues, especially from the US, indicate a supportive outlook, with major indices continuing their upward trend despite intermittent consolidation," he said.

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