Equity markets this week should be largely driven by macroeconomic data, auto sales, FII inflows and global trends, analysts said.
Negotiations on the US debt ceiling and institutional flows will also be watched by investors.
“This week, market participants will be watching institutional flows closely as there is a historical observation that when both FIIs and DIIs become net buyers at the same time, there is a chance of some profit booking in the market,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
On a global level, the issue of the US debt ceiling is of great importance alongside US macroeconomic indicators, movements in US bond yields, the dollar index and crude oil prices, Meena added.
President Joe Biden said a deal to resolve the government’s debt ceiling crisis seemed “very close” late Friday, even as the deadline for a potentially catastrophic bankruptcy was pushed back to June 5.
“Domestic, attention will be focused on key macroeconomic data, including GDP figures and monthly car sales,” he said.
This week also marks the start of the new month, so participants will be viewing high-frequency data viz. auto sales, manufacturing PMI and services PMI data. Before that, GDP data scheduled for May 31 will also be on their radar,” said Ajit Mishra, VP Research, Religare Broking.
PMI data for the manufacturing sector is scheduled for Thursday.
Aside from these factors, the performance of US markets will take center stage amid the ongoing debt ceiling talks, he added.
Last week, the BSE benchmark rose by 772.01 points or 1.25 percent.
Equity markets ended a two-week consolidation phase and gained more than 1.5 percent.
“After a solid start, the benchmark remained contained in the middle, with mixed global signals, but a strong recovery in the last sessions changed the tone. Consequently, Nifty managed to surpass the hurdle at 18,400 and settled around the week’s high of 18,499.30 levels,” said Mishra.
All sectors contributed to the movement with metals, pharma and IT being the biggest winners. The momentum continued on the broader front, with the mid-cap index rising to new highs.
“Nifty appears to be heading for a new high after the consolidation breakout, thanks to improved participation from all sectors. However, stability on the global front would be critical or the momentum could derail,” Mishra added.
“As we enter the final leg of the earnings season, we have companies such as Adani Ports, IRCTC and PFC, who will report their earnings this week,” Mishra said.
Last week, domestic market performance was affected by global signals, including concerns about the ongoing US debt ceiling negotiations, the German recession and harsh comments from US Fed officials, said Vinod Nair, chief of research at Geojit Financial Services.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – PTI)