Inflation data, US Fed interest rate decision two major factors among others to drive markets next week: Analysts – Know Nifty’s key levels

The Indian markets next week will be mainly dictated by two key factors such as macroeconomic numbers, inflation data for May, and the US Fed interest rate decision, besides the other drivers like global cues, foreign investors flow, rupee movement, and crude oil among others, analysts said.

Globally, Fed's interest rate decision as well as the volatility in crude price will keep market anxious, Yesha Shah, Head of Equity Research, Samco Securities said, adding further that the CPI and WPI inflation print, back home, will be the main headliner next week.

She said that the markets participants will keenly analyze whether the import duty restrictions and rate hikes have had a positive impact on the inflation numbers. Furthermore, statistics on India's trade balance will be closely monitored as this statistic clocked a record high in May, Shah added.

Similarly, the movement of the rupee against the dollar will also be kept an eye on, the market analyst said, advising investors to exercise extreme caution till markets decisively find their direction amid increasing macro uncertainties.

While Ajit Mishra, VP - Research, Religare Broking expects volatility to remain high next week as well and said, the participants will first react to the US Inflation, hitting a new 40-year high and then to the IIP data, which came in after the market hours on Friday.

The CPI and WPI inflation are scheduled on June 13 and June 14 respectively. On the global front, the outcome of the US Fed meet will be out on June 15.

“Markets are again reeling under tremendous pressure across the globe citing sticky inflation which could prompt swift actions by the apex banks ahead. Indications are pointing towards the prevailing negativity to continue however bargain hunting in select index heavyweights could cap the damage.”

The benchmark appears to be moving towards the support zone between 15,900 and 16,100. Despite the fact that this week's trading patterns suggest additional downside, the overall bearish momentum has moderated as Nifty is currently trading above the falling resistance line, Shah noted.

As long as Nifty does not fall below 15,900, there is a significant chance that it can test 16,800 levels. We recommend traders keep a neutral view for the coming week and avoid aggressive trades on either side, the market analyst further added.

“Indian markets last week ended 3-week long recovery spree and lost over 2 per cent, pressurised by weak cues. The tone was negative from the beginning which further deteriorated as the week progressed. The rate hike by the MPC came in line with the expectation however growing inflation concerns continue to rattle the markets on the domestic front,” according to Mishra.