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stock market analysis: As earning season gets over, here are 5 key triggers for Nifty this week

NEW DELHI: Despite Friday’s profit booking, headline index Nifty managed to close on a positive note for the fifth week in a row by registering a weekly gain of 0.34 per cent. As the peak of the earnings season is now over, the attention now shifts to macro events, FII flows and the movement in dollar index and crude oil. The scheduled derivatives expiry on Thursday will also keep participants busy this week.

“Markets may witness consolidation after five weeks of the successive rise and it would be healthy. We hardly saw any major decline in the index in the recent phases of consolidation, however a lot would depend on the performance of US indices where we still see room for further upside,” said Ajit Mishra, VP – Research,

Broking.

Here are 5 key factors that may sway the mood of the market this week:

Smart Talk



Dollar Index
The US dollar index hit a five-week high and posted its biggest weekly gain since April 2020 on Friday as investors adjusted for the likelihood that the Federal Reserve will keep hiking rates to battle inflation. Analysts say any further upside in the dollar index may disrupt capital inflows into the Indian market.

Crude oil rates

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Brent crude futures settled below $97 a barrel on Friday and fell about 1.5 per cent on the week on a stronger US dollar and fears that an economic slowdown would weaken crude demand. “In light of recessionary worries, Brent crude prices are declining and were at a six-month low last week. The market will attempt to decipher the movements of the same in the future,” Apurva Sheth, Head of Market Perspectives, Samco Securities, said.

FII flow
One of the key factors driving the rally in the market in the last few days has been the buying frenzy by FIIs. The market will be closely monitoring this trend because any reversal could cause a temporary blip, Sheth said.

Macro data
The US will release its initial jobless claims data on August 25 while on the 26th Fed Chair Jerome Powell will speak at the Jackson Hole Economic Symposium. “Global investors will be closely monitoring the remarks made by Powell as well as the minutes of the July European Central Bank meeting. During this volatile session, investors can resort to buying in dips of high-quality stocks,” Vinod Nair, Head of Research at

, said.

Technical factors

Friday’s large bearish candle has engulfed the previous three sessions’ price movement, which is a sign of weakness.

Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, said the overall trend remains strongly bullish and since we have rallied vertically from 16,400, we may see further profit booking this week. “The view remains valid as long as 18,000 is not breached on a sustainable basis. Also, in case of this probable decline, it is to be considered a healthy development for the next leg of the rally and hence should be used to go long.”

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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