Next week, we should pay more attention to the results of the Fed meeting and big data. Includes price information for India, the US, Europe, and the UK with slight weekend fluctuations.
Despite the oil price correction, the market wiped out all of last week’s gains, falling more than 1% in the tough week through December 9th. The FOMC meeting next week triggered a massive sell-off in the market.
Concerns about the growth of the global economy have driven the tech sector out of the market, followed by energy, construction, and automotive. On the other hand, banking operations and raw material purchases reduced losses.
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The leading index has shown gains for the first time in the past two weeks. The BSE Sensex is down almost 700 points to 62,182 and the Nifty50 is down almost 200 points to 18,500.
Looking at the Fed meeting results and macroeconomic data (including inflation data from India, the US, Europe, and the UK), the expert said he expects caution to deepen next week and intensify in the second half of 2020.
Ajit Mishra, VP of Strategic Research at Religare Broking, said:
Vinod Nair, head of financial research at Geojit, also believes markets will remain volatile as he waits for US and global inflation and a Fed decision next week.
Next week, we’ll tell you about 10 things that keep marketers busy.
1. High consumer prices
Nationwide, CPI inflation for November is the key indicator to watch next Monday and is expected to moderate from the 6.77% reported in October due to lower oil and food prices.
Experts say a moratorium on interest rates would help the central bank if inflation rates fall below the 6% cap set by the central bank in the coming months and stabilize.
RBI expects prices to rise 6.6% this quarter and 5.9% in Q4 2023. We expect oil to rise 6.7% this year to $100 a barrel and now $76.
We expect the CPI to decline from 6.8% in October to 6.4% in November and 6.2% in 2018. Rahul Bajoria, former Head of Emerging Asia at Barclays China, said:
Additional information: The CPI may fall to a nine-month low of 6.4% in November and the IPI to 0.4% in October.
However, after taking into account the 35 bps rate hike at the MPC meeting on Tuesday, the RBI remained stable despite slowing inflation after 11 consecutive months of high inflation. The RBI raised its benchmark interest rate by 225 bp from 4% to 6.25% in April this year.
In addition to CPI, we’ll look at industrial production for October on Monday and WPI inflation for November on Wednesday. In addition, on the current Thursday of November, the trade balance report for November is scheduled, which includes bank surplus and foreign exchange reserves growth for the two weeks ending December 2 this year. For one week until 12/18 (Fri)
3. Global macroeconomic data
Ahead of the FOMC meeting, investors around the world will be watching US inflation for November, which will be released Tuesday night. Most economists expect inflation to ease further in November after hitting a record 7.6% in October.
Inflation rates for the eurozone and the UK will also be released next week.
Here are the top global data points to keep an eye on next week:
4. Oil Prices
Falling oil prices are certainly a factor for India, a network of imported crude oil, and indeed a factor supporting the stock market. Because it eases worries about budget deficits, improves margins, and leads to better deals, but amplifies global fears. Retirement They worry that this will ultimately hurt economic growth as well.
Therefore, the market will focus not only on the oil price movements but also on economic indicators.
Oil prices in international markets plunged last week on fears of a slowdown following the latest economic data, particularly in the US, Europe, and China.
International benchmark Brent crude oil prices closed at $76.1 a barrel after an 11% weekly correction. Meanwhile, WTI crude futures fell 10.5% on the week to $71.6 a barrel.
5. FII Flow
After a month of heavy buying, the FII appears to have started selling Indian shares again, with foreign investors selling Rs 560 crore worth of shares by December. This is one reason why the Nifty has fallen from its recent high of almost 400 points.
However, domestic institutional investors continue to seek help. I bought 7,000 kroner worth of shares this month. It all boils down to the majors as they believe in medium to long-term growth for India.
The price will therefore play an important role in the development of the stock market in the coming weeks.
There will be plenty of activity in the primary market next week as three IPOs above Rs 1,800 crore are open for bid.
Sola Vinea’s IPO will start on December 12 at a price range of Rs 340 to Rs 357 per share. The offer ends December 14th.
India’s largest manufacturer and distributor will raise a total of over Rs 26.9 crore, with over Rs 736 crore provided by promoter Rajiv Samant and investors.
The second IPO is Aban Holding, part of Aban Group. This offer is valid for subscriptions from December 12th to 15th. The financial services company will raise Rs. 345.6 crore through an Rs. 1.28 crore share offering consisting of a recently issued Rs. 1.26 crore and a Rs. 2.43 crore offering by investor Abhishek Bansal. The target price for the stock is Rs 256-270.
Luxury car dealer Frontier Cars will begin its first third-party offering on December 13 and close on December 15. The initial offering of shares is valued at Rs 150 crore and sales offers from promoters and investors are valued at Rs 420 crore. The price range for this offering is Rs 481-506 per share.
Separately, it will be listed at Uniparts India on Monday.
7. Technical Opinion
Nifty50 lost nearly 400 points as it held a record 18,500 critical supports for multiple sessions. The index has generated a bullish pattern on the daily chart and a bullish pattern on the weekly chart, indicating that the bears are strong.
Thus, on November 10th and 22nd, we found a support indicator (18,410) at the supply trendline.
8. F&O metrics
Options data suggests that the 18,500-18,800 area could be a near-term resistance area for the Nifty50, where most options have seen it, while the 18,300 and 18,000 areas are the areas key support for the index. Therefore, there will be a wide range between the 18,300 and 18,900 levels in the next session.
For options, the highest open interest was 19,000, then 20,000, 18,700, the highest from 18,500 to 18,800, the highest open interest was 18,000, then 18,500, then 18.50. 17,500 strikes are written 17,500 strikes, and 18,700 strikes follow.
9. Indian Week
The Indian VIX volatility index also appears to have stabilized below 15 and has now been in the 13-15 range for almost a month.
India’s VIX index is 13.48 compared to 13.45 per week.
10. Corporate Action
Alstone Textiles (India), CL Education, and Gloster will make ex-gratia deals next week, while Star Housing Finance is making ex-gratia deals and dividends.