RBI policy meet, corporate earnings, and other key triggers to drive markets next week

Indian equities slipped in Friday's session as weak global cues weighed on sentiments. Nifty finished over 1 per cent or 293.2 points lower at 24,717.7, while the Sensex retreated by 1.08 per cent or 885.59 at 80,981.95.

Sectorally, it was a sea of red as benchmarks witnessed increasing volatility as economic growth concerns came to the fore in the US after the macro data. Also, heightened geopolitical tensions in the Middle East led to risk-off sentiment.

As per Vinod Nair, Head of Research, Geojit Financial Services, the Indian market is showing signs of fatigue at higher levels, as most positive factors have already been priced in. Subdued Q1FY25 earnings and stretched valuations are not reassuring investors.

Further, Nair believes the chances of further consolidation seem elevated due to premium valuations, weak Q1 results, and ongoing global market consolidation. The RBI policy meeting next week could provide some hints towards an outlook on rates, while expectations are to maintain the status quo as of now.]

Technically, as per Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd., the Nifty index has formed a negative candle, closing the week in the red, indicating a potential further downside move in the coming week after reaching a fresh all-time high. The next support level is at 24,500, and if this level breaks, we could move towards 24,200. On the resistance side, 24,900 is the immediate level to watch, and if the index moves above this, we could see a rise towards 25,200.

"The market structure appears weak, suggesting a "sell on rise" approach for Monday," said Nanda.

On the global front last week, the Federal Reserve decided to keep the Federal Funds rate unchanged aligning with market expectations. The Fed signaled that it may consider a rate cut as early as September if inflation eases, reflecting a cautious but proactive stance on monetary policy.

Further, the Volatility Index (VIX) increased to 18.58 from 16.38, reflecting a rise in market uncertainty and risk aversion.

Triggers that can affect the global markets are: 

>> The release of the Bank of Japan's interest rate meeting minutes.

>> The upcoming CPI and PPI data will be critical in assessing the state of the Chinese economy. 

>>The US ISM Services PMI.

>> Crude oil prices.

"Market sentiment and economic data releases will play a crucial role in driving future movements in these asset classes," said Alex Volkov, Market Analyst at VT Markets.

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