Markets Next Week: Macros, Earnings Will Drive Markets

Indices ended the week in the green owing to recovery in the global markets as even after the US CPI came in at a 41-year high, some of the policymakers preach for a 75 basis point rate hike in the next July Fed meet.

Markets Next Week: Macros, Earnings Will Drive Markets

On a weekly basis, the Nifty which settled at 16049.2, declined by over 1 percent.

Also, in the overnight session, the US markets ended with solid gains with Dow Jones ending over 2% higher. The global markets are anticipating that while the rate hike will go on for now, policymakers would resort to a pause in order to prevent prolonged recession.

"Volatility has re-emerged and investors have turned their focus on upcoming Fed policy in the backdrop of heightened US inflation. Fall in crude prices and reduction in FII selling added optimism to the domestic market while gloomy IT results, depreciating rupee and fear of global recession are restricting sizeable up move," said Vinod Nair, Head of Research at Geojit Financial Services.

What lies next week for the Indian stock markets?

Global cues, earnings will continue to dictate market sentiments. Today, HDFC Bank were released and hence markets shall possibly react to it when it opens on Monday. The lender posted 19% growth in net profit on a YoY basis with net profit for 1QFy23 at Rs. 9195.99 crore.

"Markets will first react to the banking major, HDFC Bank, numbers in early trade on Monday. Besides, the performance of the global indices especially the US markets and movement in crude will remain on participants' radar. Amid all, we recommend continuing with a positive yet cautious approach till Nifty holds 15,900 and focusing more on stock selection," said Ajit Mishra, VP - Research, Religare Broking.

As per experts, technically minor support on the downside for nifty 50 index lies at 15850 levels, whereas minor resistance on the upside is capped around 16150-16200 levels. If nifty 50 index breaches minor support on the downside and closes below it, there may be seen fresh break down and index can drag towards major support on lower side around 15600 and if breaches minor resistance on the upside and closes above it, there may be seen fresh breakout and index can head towards higher levels around 16350.

Currently nifty 50 index is trading below 200 days exponential moving average and suggests long term trend is bearish. EquityPandit's analyst predicts range for the week is seen from 15650 on downside and 16300 on upside.