What Lies For Dalal Street In Upcoming Week? Market Awaits US GDP Data; Nifty At 22,000; F&O Expiry

The Indian stock market witnessed a notable rebound in the week ending March 22, buoyed by a strong recovery in the latter half of the week. The resurgence was fueled by a dovish stance from the US Federal Reserve and robust buying activity by domestic institutions, countering the selling pressure from foreign institutional investors (FIIs).

Initially, the market exhibited caution ahead of the outcome of the Federal Open Market Committee (FOMC) meeting. However, sentiment turned bullish after the US Federal Reserve revised its economic growth forecast for 2024 upward to 2.1% and signalled a possibility of three rate cuts this year, despite inflation surpassing its long-term target of 2%.

The BSE Sensex closed 0.3% higher at 72,832, while the Nifty 50 also rose by the same margin to reach 22,097. Notably, the broader markets showed resilience, with the Nifty Midcap 100 index climbing 1.3% and the Smallcap 100 index surging 1.4% after experiencing significant corrections in the previous week. While most sectors participated in the market's upswing, technology and FMCG sectors lagged behind.

Looking ahead to the upcoming week, experts anticipate the market to remain range-bound and volatile due to the monthly derivative contracts' expiry and reduced trading volume owing to holidays. All eyes will be on the US GDP numbers, which are expected to influence global investor sentiment.

Here are some key factors that are likely to dominate discussions on Dalal Street in the coming week:
US GDP Data: Investors globally will closely monitor the quarterly US GDP final data scheduled for release on March 28. The speech by Federal Reserve Chair Jerome Powell on March 29 will also be scrutinized for insights into the timing of rate cuts and the inflation outlook.

Global Economic Data: Apart from US GDP numbers, market participants will focus on various economic indicators, including new home sales, durable goods orders, jobs data, PCE prices, and personal income & spending data from the US. Additionally, data from the Bank of Japan's monetary policy meeting minutes, UK GDP numbers for Q4-2023, and China's current account data for Q4-2023 will be watched.

Domestic Economic Data: On the domestic front, attention will be on current account and external debt numbers for Q3FY24, fiscal deficit and infrastructure output data for February, and foreign exchange reserves for the week ended March 22.

FII & DII Flow: Market watchers will track the flow of funds from foreign institutional investors (FIIs) and domestic institutional investors (DIIs). Despite subdued FII inflows, strong buying by DIIs has been supporting the market.

Oil Prices: The trajectory of oil prices, influenced by geopolitical tensions and global economic factors, will continue to impact market sentiment. While oil prices experienced some cooling towards the end of the week, experts maintain a bullish outlook in the short to medium term.

IPO Activity: The primary market is expected to witness significant activity, particularly in the SME segment. Several IPOs are scheduled for launch, including SRM Contractors in the mainboard segment and offerings from Trust Fintech, Vruddhi Engineering Works, Blue Pebble, Aspire & Innovative Advertising, and GConnect Logitech and Supply Chain in the SME segment.

F&O Expiry: Volatility is expected as the market approaches the monthly F&O expiry on March 28. Options data indicates key support and resistance levels for the Nifty 50.

India VIX: The India VIX, a measure of market volatility, fell during the week, providing some relief to investors. Continued stability in volatility could bolster confidence among market participants.

While the market demonstrated resilience amid global economic uncertainties, investors should remain vigilant and monitor key indicators to navigate potential volatility in the week ahead. With a mix of domestic and international factors at play, prudent risk management strategies will be crucial for market participants.

Disclaimer: The opinions and suggestions provided above represent the views of individual analysts and do not reflect those of GoodReturns or the author. We recommend investors consult with certified experts before making any investment decisions.