Welcome to Indian Share Market
Updated on 11 June 2017
Four key factors are likely to chart market direction this week
Last week was as eventful and action-packed for Dalal Street as anticipated.
If isolation of Qatar by major Gulf countries was a shocker to the markets on the opening day of the week, the unforeseen hung verdict in the UK general elections on Friday proved to be a bigger bombshell, at a time when Britain is preparing to negotiate Brexit with the European Union.
Fed policy meet outcome
The US Federal Reserve, which begins its two-day rate-setting meeting on Tuesday (June 13), is widely expected to raise interest rates for the second time this year. Although the recent soft macroeconomic numbers signal that the world's largest economy was not at its peak, yet market analysts and experts expect the Fed to stick to its guns.
At the policy meeting last month, the US central bank had left the rates unchanged between 0.75 per cent and one per cent, and policymakers said they would wait to see whether evidence supported another rate hike.
Domestic macroeconomic data
The equity market will keenly watch key economic indicators - IIP data and inflation numbers to be release on Monday. Industrial output growth slipped to 2.7 per cent in March, chiefly because of poor performance of the manufacturing sector, as indicated by the IIP data based for the revised base year of 2011-12.
The index of industrial production (IIP) grew 5.5 per cent in March 2016. On the other hand, the wholesale price-based inflation (WPI) rose 3.85 per cent year-on-year in April.
UK political situation
UK premier Theresa May shot herself in the foot when she announced snap elections in mid-April in order to have smooth Brexit talks with the European Union, only to have a devastating verdict in the polls.
Contrary to her beliefs, the Conservatives failed to score a majority in the elections, creating fresh political turmoil in Britain. Her problem has only escalated as her two closest aides, Nick Timothy and Fiona Hill, resigned on Saturday following sustained criticism of the campaign within the party. Any development in this ongoing political drama could have an impact in the Indian market too.
The overall sentiments are bullish so it is highly expected that markets will go up but current international events are making market to consolidate.
Currently Nifty has taken support at 9600 and any break below this will lead it down till 9400 but this chance has very rate possibility unless any major bad news enters market.
On the upper side, Nifty has strong support at 9700 and breaking this level would take it to 9800. We already predicted Nifty at 10,000 either Dec 2017 or Mar 2018.