NEW DELHI: During the week gone by, global sentiment outweighed favourable triggers such as softening crude price and a strengthening rupee to cause domestic equity benchmark Sensex snap its winning streak of three consecutive weeks.
A selloff in US technology stocks degenerated into a rout in emerging markets that have been trying to come to terms with the jolts of trade war and concerns over slower economic growth.
The RBI-government tussle ended on a cordial note at the central bank's board meet, but failed to give market any impetus.
Sustained selling in most sectors dragged Sensex by 476 points, or 1.34 per cent, while Nifty lost 155 points, or 1.46 per cent, last week.
Despite all the unpredictability, here are the factors that will influence market direction in the coming week. Let's take a look:
F&O rollovers: Market may witness bouts of volatility next week as the November series futures and options contracts expire on Thursday and investors roll over positions to December series. Nifty futures closed in the negative at 10,518 with a loss of 0.98 per cent on Thursday. On the options front, maximum Put open interest was at 10,000 followed by 10,500, while maximum Call OI was at 10,700 followed by 11,000 levels. There was Call writing at 10,600 followed by 10,700 whereas Put unwinding was seen at all immediate strike prices.
Global sentiment: Global cues may remain the most dominant factor that will steer market mood next week. Investors across global markets will closely observe how tech stocks fare on Wall Street as the sector has been among the most important indicators of the health of the market and even economy in a broader sense. A further downward swing in tech counters will strengthen concerns of slowing economy.
Fed minutes of meeting: Minutes from the Feds November meeting will be an important cue for market mongers this week. Investors and market experts will try to find cues on future trajectory of Fed policy rate in Chairman Jerome Powell's speech at the event. While a rate rise in December is widely expected, it will be interesting to see if Fed contemplates concerns of market turbulance and slowing economic growth.
Trump-Jinping meet: Probably the most important market trigger of recent times, the US-China trade war, may come to the table for discussion when US President Donald Trump meets his Chinese counterpart Xi Jinping at Buenos Aires, Argentinas capital, during the G20 summit. "Pre-summit comments do not suggest a rapprochement is in the offing, but Buenos Aires may be the last chance saloon. If the talks fail, China and Asia will face tougher times," Reuters reported.
Brexit: An early-December parliamentary vote on Brexit is looking tough for British Prime Minister Theresa May, keeping the parliamentary arithmetic in mind. As per Reuters, a lost vote for the government could spark chaos in financial markets, as investors panic that Britain is headed for a disorderly and potentially damaging exit from the EU in March.
India's GDP numbers: India's second quarter GDP numbers will be released next Friday. India's economy grew at an impressive 8.2 per cent in the first quarter of 2018-19 ending June 30 on the back of strong core performance and a healthy base. Second quarter growth numbers may come at 7.2-7.9 per cent as per independent economists. Global credit rating agency Moody's Investors Service has projected Indias economic growth to moderate to 7.3 per cent in 2019 and 2020, as higher oil prices combined with rupee depreciation and monetary tightening dampen domestic demand. India's October fiscal deficit numbers and infrastructure output numbers will also be released on the same day.
Global macros: Japan's November manufacturing PMI, Bank of Japan Core CPI print, the preliminary release of the US Q3 GDP and the new home sales numbers for October, China's manufacturing and non-manufacturing PMI for November and eurozone's CPI for November are the other key macro numbers that may influence market sentiment.
Crude oil: Falling for the seventh consecutive week, global crude oil prices plunged about 8 per cent to its lowest levels in over a year on Friday amid concerns over possible oversupply. Falling crude is no less than a boon for the Indian economy. A further slide in global crude prices may infuse optimism among FPIs on the Indian market.
Technical outlook: On the weekly chart, the Nifty formed a Bearish Engulfing pattern last week, which does not augur well for the index. A weak trend in Bank Nifty may just supplement the ongoing bearish trend. "Nifty continued to slide from the peak made near 10,775 levels whereas BankNifty also has indicated weakness to close just below the 200-DMA which lies at 26,010 level and has turned down the daily trend. The support for the week is seen at 34,360/10,320 while resistance is seen at 35,500/10,700. Bank Nifty would have a range of 25,350-26,540. The bias has turned somewhat cautious and the chances of some downward movement in the coming days cannot be ruled out," said Vaishali Parekh, senior technical analyst at Prabhudas Lilladher.
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