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 closed on a positive note for the fifth consecutive week registering a weekly gain of 0.34 per cent. As the earnings peak is over, the focus now shifts to macro events, FII inflows and volatility in the dollar index and crude. The derivatives expiry scheduled on Thursday will also keep the participants busy this week.

“After five weeks of consistent growth, the market can see strength and will be healthy. In the recent phases of consolidation we have hardly seen any major downside in the index, although much will depend on the performance of the US indices where we still see room to move,” said Ajit Mishra, VP – Research.


Here are 5 key factors that could affect the market mood this week:

dollar index
The US dollar index rose to a five-week high and posted its biggest weekly gain since April 2020 on Friday as investors adjusted for the possibility that the Federal Reserve would hike rates to fight inflation. Analysts say a further rise in the dollar index could hamper capital flows into the Indian market.

crude oil rates

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Brent crude futures fell below $97 a barrel on Friday and fell nearly 1.5 per cent in the week on a stronger US dollar and fears that an economic slowdown will weaken demand for crude. “In light of bearish concerns, Brent crude prices are falling and were at six-month low last week. The market will try to understand the movements of the same in future,” said Apoorva Sheth, Head of Market Perspectives, Samco Securities.

FII flow
One of the major factors driving the market up in the last few days has been the buying frenzy by FIIs. Sheth added that the market will closely monitor the trend as any reversal could result in a temporary setback.

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


technical factor

Friday’s big bearish candle has engulfed the price movement of the past three sessions, indicating weakness.

“Overall the trend remains strong and since we have made a vertical rally from 16,400, we may see more profit-booking this week,” said Sameet Chavan, Chief Analyst – Technical & Derivatives, Angel One. “This view remains valid as long as 18,000 is not breached on a permanent basis. Also, in case of this potential downside, it should be considered a healthy development for the next leg of the rally and therefore should be taken over the long run. Must be used to last.”

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


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