US Dollar to Q2 GDP data: Top 5 triggers that could affect the stock market this week

“During the last week, we were not expecting a side move in the market and we expected the rally to be arrested near 16,450. However; stock market bulls Unleashed during the week and we saw a move of over 4 per cent in Nifty Spot. This was mainly due to positive global cues and short covering by FIIs in index futures,” said Mehul Kothari, AVP – Technical Research at Anand Rathi.

“This week was very good for the markets as it saw gains in all the 5 sessions. In the last month, mid-cap and small-cap have gained 10+ per cent. Due to fall in commodity prices, FMCG And autos have rallied, and there are early signs of a revival in rural demand. But all may not be positive as the US Fed heads to a meeting next week for its policy decisions, and another rate hike could shake the market. “Sonam Srivastava, Founder, Wright Research.

Here we are listing the top 5 triggers that could affect the Indian stock markets this week:

1]US Fed Meeting: “Due to the harsh stance of the US central bank, the market is expecting a major rate hike announcement from the monetary policy meeting of the US Federal Reserve. This is expected to set the tone for the future financial markets as it is once again FIIs. “US bond yield in such a scenario is expected to attract more money than the equity market,” said Anuj Gupta, Vice President – Research, IIFL Securities. The dollar index has softened over the past week and the US Fed interest rate hike could revive demand for the US dollar as ‘investors’ may see a sharp rise in the US dollar (USD) against major currencies including the Indian national. Rupee (INR).

2]US Q2 GDP Data: “US Q2 Gross Domestic Product (GDP) numbers are coming out on 28th July 2022 and the whole world is eagerly waiting for this release. This data is expected to give a perfect picture of the US economy and it will be a global tone. Equity markets including Dalal Street will set. Positive Q2 GDP numbers could trigger a rally in Nasdaq, followed by Indian IT stocks numbers. As Nasdaq follows US job data and FDP numbers, towards US government Any positive announcement on the GDP front could trigger a trend reversal in Indian IT stocks,” said Anuj Gupta of IIFL Securities.

3] Nasdaq Index: One has to be cautious about the results of the 5 big tech companies listed on Nasdaq – Microsoft, Google, Meta Platforms, Apple and Amazon. These companies are going to announce their quarterly earnings next week. The announcement of positive quarterly earnings by these tech giants could be an extension of the Nasdaq rally that began last week. Also, Nasdaq follows US jobs and GDP data and US Q2 GDP coming out next week on July 28. Therefore, Indian bulls waiting for a trend reversal in Indian IT stocks are advised to stick to these triggers related to the Nasdaq index,” said Anuj Gupta.

4]Company Results: “Next week we will see over 200 companies post their earnings. Among them are HDFC, Tata Motors, ITC, LT, Asian Paint, and BazFinance, among many other prominent names. The numbers posted, as well as management commentary Will be important for the direction of the market,” Sonam Srivastava said.

5]Commodity Prices: “Crude oil has cooled to $96 a barrel, and many are cheering this as a sign of easing inflation. Similarly, metal prices are low, cheering commodity consumers, but with inflation muted. Looking at the environment, you never know when the prices will start rising again. So commodity prices will be an important trigger to watch,” said Sonam Srivastava.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.

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