Key Factors Driving Indian Markets Next Week: RBI MPC, PMI, and Global Trends
The Indian stock market is gearing up for another week of ups and downs, as various important economic events unfold both at home and abroad.
Last week ended on a positive note for the Indian stock market. The BJP-led Mahayuti alliance’s success in the Maharashtra Assembly elections provided a boost, and both the Nifty 50 and Sensex saw significant gains. The Nifty 50 climbed 223 points to close at 24,131, while the Sensex rose by 685 points to end at 79,802. Despite the overall positivity, global economic uncertainty led to some volatility. Banking shares played a major role in driving the market up, with the Bank Nifty reaching 52,055, up by 920 points. HDFC Bank, one of India’s leading private sector lenders, also hit a new all-time high.
Foreign Institutional Investors (FIIs) reduced their selling pressure last week, selling Rs 5,026 crore in the cash market between November 25 and November 29. Meanwhile, Domestic Institutional Investors (DIIs) were active buyers, purchasing Rs 6,924 crore during the same period.
Looking ahead, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting will be a key focus. With the country’s GDP growth rate for the second quarter of FY25 at 5.4%, all eyes are on the RBI’s interest rate outlook. While the repo rate is expected to remain unchanged for now, there is speculation about a rate cut in the next policy review in February due to slower economic growth. Market reaction and future rate cut signals from the RBI could impact investor sentiment.
Investors will also closely monitor Purchasing Managers’ Index (PMI) data for the manufacturing and services sectors. Strong numbers from these key sectors can reassure investors about the economy’s strength, while weaker data could raise concerns about growth.
In addition to the RBI meeting and PMI data, auto sales figures and US job data will be watched closely. Positive auto sales could boost market sentiment, while disappointing data might lead to caution. Global events, like US job numbers and PMI data, will also weigh on market trends.
From a technical standpoint, the Nifty 50’s movement above its 21-day exponential moving average indicates crucial support around the 23,800 level. Continued positive momentum could be seen if the index remains above this level, but a breach could trigger a downward trend towards 23,400.
In conclusion, the coming week will be marked by various economic events that will shape market sentiment. Investors should keep an eye on the RBI meeting, PMI data, auto sales, and global indicators for cues on how the market might move. Given the present global uncertainty, maintaining a diversified portfolio and staying informed will be key to navigating market fluctuations.
