14 May Karnataka Election Result Impact to China Crash – Top Factors to drive Dalal Street this week

Dalal Street Week Ahead: Key Factors that will drive the Market

The Nifty is inching closer to its highest point ever, standing just 573 points away from its record of 18,887.60. This impressive feat has been fueled by substantial investments from foreign institutional investors (FIIs), leading to seven consecutive weeks of positive growth and a notable one percent increase.

However, even as the Nifty soars, there are doubts lurking in the market. Experts are cautious about the direction of interest rates and how they could affect the market. They are concerned about a potential slowdown in demand from China and fears of a recession in the United States, which add uncertainty to the equation and impact investor confidence.

Last week:

-The Nifty remained just 573 points away from its all-time peak of 18,887.60.

-Foreign institutional investors (FIIs) poured over INR 23,000 crore into Indian stocks, driving the market’s upward momentum.

-Despite the positive influence of FIIs, investors expressed skepticism over interest rate movements, particularly due to concerns about a demand slowdown in China and recession fears in the US.

-The Nifty ended the week higher, marking the seventh consecutive week of gains and achieving a nearly one percent increase.

This week:

-The Nifty is now within 573 points of its all-time peak, riding high on the influx of FII investments.

-Market participants will closely monitor macroeconomic data, including the Industrial Production (IIP) and Consumer Price Index (CPI) data, which were released after market hours on Friday.

-The Wholesale Price Index (WPI) inflation data is scheduled for release on May 15 and will be an important factor to watch.

-Global cues, especially the performance of US indices, and the trend of foreign flows will be in focus for market participants.

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Here are the major factors that will drive both bulls and bears on Dalal Street next week:

Poll Watch:

-The victory of the Congress party in the Karnataka elections had already been anticipated by investors, leading to minimal market reaction.

-However, it may have a sentimental negative impact on the market, according to some experts.

Q4 Earnings Season:

-The ongoing Q4 earnings season has generally been in line with market expectations, although there have been some negative surprises from IT companies.

-This week, notable companies such as

-Bharti Airtel,
-SBI,
-ITC,
-Zomato, and
-Tata Consumer

will announce their earnings, along with several others.

Adani SC Hearing:

-The Supreme Court’s decision on the extension sought by SEBI in the Hindenburg investigation case on Monday will be closely watched, particularly impacting Adani Group stocks.

-Additionally, the court will review the sealed cover report submitted by the expert committee led by former Supreme Court judge Abhay Manohar Sapre.

FII Flows:

-Foreign institutional investors (FIIs) have been significant drivers of the market rally, investing over Rs 23,000 crore in Indian stocks thus far in May.

-In the last 12 trading sessions, FIIs have consistently been net buyers, indicating a renewed interest and favor towards India as an emerging market.

Nexus IPO Listing:

-The listing of the Rs 3,200 crore initial public offering (IPO) of Blackstone-backed Nexus Select Trust real estate investment trust (REIT) is expected to take place on Friday, May 19.

-Nexus will become India’s first REIT with rent-yielding retail real estate assets upon listing.

Global Markets:

-Wall Street’s mood has been influenced by the March quarter earnings season and macro data reports, resulting in the Dow Jones ending the week 1.1% down while the Nasdaq rose 0.4%.

-Global market trends will continue to impact investor sentiment.

Technical Factors:

-The Nifty formed a long bull candle on the weekly charts, indicating positive momentum. It has broken through its intermediate resistance at 18,100 levels and experienced a horizontal trendline breakout on the daily timeframe.

-Technical analyst Rohan Patil from SAMCO Securities suggests that the Nifty may move towards higher levels, specifically targeting 18,500-18,600 levels in the coming week.

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