A fresh lifetime high is now just a number, but what matters is if the market sustains the momentum, or does it fizzle out soon after a new milestone is achieved.
“The Nifty is now knocking on the door of clocking fresh record highs and even reaching yet another milestone of 19,000,” says Sameet Chavan, head technical and derivative research, Angel One.
Considering a strong close above 18,800 and with recent laggard, BFSI space participating in the upmove on Friday, Chavan said that a new record in the first half of forthcoming week itself won’t be surprising.
On Friday, Nifty50 ended 0.7% higher at 18,826 points, and is about 62 points away from its lifetime high of 18,887.6 points, touched on December 1, 2022. The Sensex closed at 63,384.58, up 0.7% from the previous close. The 30-stock index is about 162 points away
from its lifetime high of 63,583.07 points.
The sustained buying by foreign portfolio investors has helped indices inch closer to their record highs. Therefore, this is one factor that will continue to drive the market and will be closely monitored. Besides FII flows, few macroeconomic indicators, Bank of England’s interest rate decision and monsoon trends back home will be closely tracked by investors.
Macro Indicators
On Wednesday, the UK will release the consumer inflation data for May, just a day before the Bank of England’s policy decision.
On June 22, Bank of England is widely expected to raise interest rates by 25 basis points to a 15-year high of 4.75%, marking its 13th straight rate increase, as the country fights against sticky inflation.
On June 22, the Reserve Bank of India will release the minutes of its monetary policy meeting held on June 6-8.
Further, the US Federal Reserve Chairman Jerome Powell will present the monetary policy report to the US Senate Banking Committee.
On June 23, the preliminary manufacturing data for June will be released in France, Germany, Eurozone, UK, and the US.
Monsoon Watch
The trend of monsoon rains will be closely tracked by investors back home, given that it has already been delayed.
The overall rainfall is significantly below normal, according to data shared by the Indian Meteorological Department. Rainfall since June 1 was lagging by 47%, data showed. The low rainfall is partly due to the El Nino phenomenon.
For the momentum on Dalal Street to sustain, monsoon rains need to gather pace.
FII Flows
Foreign fund inflows have been the key driver for markets in India, particularly in the last 3 months. So far in 2023, FPIs have poured in about $7.9 billion into Indian equities, data by NSDL showed.
“This sustained investment by FPIs is a reflection of their increasing confidence in the resilience of the Indian economy and the potential earnings of the corporate sector,” said V K Vijayakumar, chief investment strategist, Geojit Financial Services.
“There is a near consensus among the foreign investing community that India has the best growth and earnings story among the large emerging economies. FPIs are investing to exploit this potential,” Vijayakumar said.
IPO Watch
SME IPO of Aatmaj Healthcare will open for public subscription on Monday and close on Wednesday.
The company is into offering healthcare services and it provides inpatient and outpatient healthcare services through its hospitals at Vadodara, Gujarat with an aggregate bed capacity of 130 beds extendable up to 175 beds.
Technical Indicators
The strong upmove on Friday has helped the Nifty 50 give a good breakout on technical charts. According to chartists, the 50-stock index has formed a long positive candle with minor upper shadow on the daily charts. This indicates an upside breakout of 18800 levels and moving closer to hit a fresh record high.
According to Chandan Taparia of Motilal Oswal Securities, Nifty has to hold above 18,777 to witness an upmove towards 18,888 and 19,000 zones. On the downside, support exists at 18,710 and 18,676 zones.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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