The Indian stock market will be watchful of global factors after the portfolio allocation and monetary policy decisions are settled, next week.
Analysts believe that investors will keep an eye on the US Fed interest rate decision, India's inflation data, and the decisions of the new government for the upcoming week starting from Monday.
The US Fed will declare its core and consumer price inflation figures, alongside the US Federal Reserve's interest rate decision and Federal Open Market Committee (FOMC) economic projections on 12 June. The Bank of Japan will also declare its interest rate decisions this week.
Domestically, On 12 June 2024, India will declare industrial production data and inflation data which will be closely tracked by the investors.
India's retail inflation eased to 4.83 per cent in April, down from 4.85 per cent in March. However, consumer food price inflation surged to 8.70 per cent from 8.52 per cent last month.
The retail inflation in India though is in RBI's 2 to 6 per cent comfort level but is above the ideal 4 per cent scenario.
"We believe volatility is likely to decrease now that major events are behind us, with the focus shifting to domestic macroeconomic data such as IIP, CPI, and WPI for further signals. Additionally, global cues, particularly the upcoming US Fed meeting, will be closely watched by participants. The recovery following the post-election decline suggests resilience among participants, and we expect the prevailing tone to continue," said Ajit Mishra, SVP, Research, Religare Broking.
"Next week's focus will be on the allocation of key cabinet portfolios such as Finance, Defense, Roads, Energy, Commerce, and Railways. The market will continue to be volatile with upward biasedness," said Siddhartha Khemka, Head - of Retail Research, at Motilal Oswal Financial Services.
Mishra recommended to maintain a positive outlook unless the Nifty decisively breaks below 22,600, with an upside target in the 23,800.
"The renewed participation of sectors like IT and FMCG, which were previously on the sidelines, supports our confidence. However, traders should remain cautious and focus on stocks that are moving in line with the benchmark," he added.
Owing to the volatile situation in the market, the foreign portfolio investors (FPI) became the net sellers for the third consecutive month in June, offloading equities worth over Rs 14,794 crore. (ANI)
