Sensex, Nifty this week: From loan, deposit growth to US jobs data, factors that may drive Dalal Street

Sensex, Nifty this week: From loan, deposit growth to US jobs data, factors that may drive Dalal Street

Indian equity benchmarks last week posted healthy gains amid positive macroeconomic data. This week bank, loan and deposit growth data, HSBC Manufacturing PMI and Services PMI data in India, along with Existing Home Sales and FOMC Minutes in the US are major events that will keep the markets buzzing.

Economic data: Traders will be tracking HSBC Composite PMI Flash, HSBC Manufacturing PMI Flash, and HSBC Services PMI Flash, which is scheduled to be released on February 22. On the same day, monetary policy meeting minutes are going to be released. Traders will be looking for the Foreign Exchange Reserves, deposit growth and bank loan growth data to be out on February 23. Foreign Exchange Reserves in India increased to $622.470 billion on February 2 from $616.730 billion in the previous week.

Besides Finance Minister Nirmala Sitharaman is scheduled to review the state of the economy amid global challenges at a meeting of the Financial Stability and Development Council (FSDC) on February 21. The 28th meeting of the high-level panel will be attended by all financial sector regulators.

US market data: On the global front, the coming week will be holiday-shortened as the US markets will remain closed on February 19 for Washington’s birthday. On the economic data front, investors will be eyeing Redbook on February 21, FOMC Minutes, Chicago Fed National Activity Index, Initial Jobless Claims, S&P Global Composite PMI Flash, Existing Home Sales on February 22, Baker Hughes Oil Rig Count on February 23.

Global Market Update: Mahavir Lunawat, Managing Director of Pantomath Capital Advisors said, that US indices remained negative for the week, with earnings-specific volatility also present in the US market. The CPI for January was reported at 3.1%, above the expected 2.9%. This higher-than-expected US inflation figure has reduced expectations that the Fed will cut interest rates soon. The odds for a 25 bps cut in May have dropped to about 35%, and those for June now stand at nearly 51%. Fed officials have indicated that any decision to cut interest rates in the coming months will be data-dependent.

Market outlook

Nifty: Nifty ended higher for the fourth consecutive session on February 16. Nifty rose with an up gap and remained in a narrow 80-point band later. At close, Nifty was up 0.59% or 129.9 points at 22040.7.

Market veteran Deepak Jasani, Head of Retail Research at HDFC Securities, says shares advanced in Europe and Asia on Friday after stocks on Wall Street set a fresh record following mixed reports on the state of the U.S. economy. Hopes of imminent rate cuts by the European Central Bank and a decline in bond yields lifted investors’ appetite for risky assets.

“Nifty is forming a spinning top-like pattern after a two-day rise. On a weekly basis, Nifty rose 1.19%. Nifty could now face resistance in the 22126-22280 band while 21616 could offer support. A fresh positive trigger may be required for the Nifty to make a new high and sustain above it,” Jasani said.

Bank Nifty: Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities says with bulls keeping their dominance, a positive momentum can be seen. Despite minor rejections at the immediate hurdle of 46,700, the overall undertone remains bullish.

“Any dips are seen as buying opportunities, especially with strong support identified in the 46,000-45,800 zone. The index, once it surpasses the hurdle of 46,700 on a closing basis, is anticipated to open up further room for an upward move towards the 48,000 mark”, Shah added.

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