Market Outlook for Next Week: Key Triggers from PMI, Auto Sales, and Global Economic Data
Explore the market outlook for next week, focusing on key economic triggers including India's PMI, auto sales data, and global economic indicators. Learn how these factors could shape market sentiment and influence stock market trends.
New Delhi: The market outlook for the coming week will be significantly influenced by crucial domestic and global economic data, including India’s Current Account Q3, Bank Loan Growth, HSBC Manufacturing PMI (December), India’s Infrastructure Output, and key economic indicators from the United States, such as the US Fed Balance Sheet, US Initial Jobless Claims, and US ISM Manufacturing PMI. These data points will serve as important catalysts for the stock market’s performance.
Last Week’s Market Performance
The Indian stock market experienced a positive closing last week, with both benchmark indices, Sensex and Nifty, ending the week on a high note. The Sensex surged by 657 points, or 0.84%, to close at 78,699, while the Nifty gained 225 points, or 0.96%, to settle at 23,813. The rise in banking stocks contributed to the positive momentum in the broader market. Among the sectoral gains, pharma and healthcare stocks emerged as the top performers.
Foreign Institutional Investors (FIIs) were net sellers during the trading session between December 23 and December 27, offloading Rs 6,322 crore worth of stocks. However, Domestic Institutional Investors (DIIs) stepped in as buyers, injecting Rs 10,927 crore into the cash market. This has led to an interesting shift in market dynamics, where domestic investors have shown a greater appetite for the market despite the foreign outflows.
Key Triggers for the Upcoming Week
1. India’s Economic Data: Current Account, Bank Loan Growth, and Infrastructure Output
The market will closely watch the release of India’s Current Account Q3 numbers, set for December 31. These data points will offer insight into India’s external trade position, which can have significant implications for the rupee and market sentiment. According to Santosh Meena, Head of Research at Swastika Investmart, the current account deficit figures could provide important signals for currency markets, especially given the recent weakness in the rupee.
Additionally, India’s Bank Loan Growth data will be keenly observed as it reflects credit demand, which is often a barometer for economic activity. Similarly, India’s Infrastructure Output figures will provide valuable insights into the state of the economy, particularly in sectors like construction, energy, and manufacturing.
2. Auto Sales Data: A Potential Boost for Market Sentiment
The monthly auto sales data is expected to be another key factor driving market sentiment. The auto sector has faced challenges over the past few months, with some analysts maintaining a cautious outlook. However, any positive surprise in auto sales could potentially uplift investor sentiment, particularly in the automobile and related sectors.
The auto sector’s performance is crucial as it serves as a bellwether for consumer demand and the broader economic outlook. A rise in auto sales could indicate strengthening consumer confidence, especially if the data surpasses market expectations.
3. Global Economic Data: US Jobless Claims and PMI Reports
On the global front, economic data from the United States will take center stage. The US Fed Balance Sheet and US Initial Jobless Claims will provide insight into the country’s economic health and labor market dynamics. The US ISM Manufacturing PMI for December will also be a closely monitored indicator, as it reflects the state of the manufacturing sector and overall economic growth.
Also Read | Indian Stock Market Closes Flat Amid Range-Bound Trading, Eyes on Q3 Results
Technical Analysis: Nifty’s Support and Resistance Levels
From a technical analysis perspective, Puneet Singhania, Director at Master Trust Group, noted that the Nifty has consistently found support near the 23,650 level on the daily chart. The index ended the week with an inside candle on the weekly chart, signaling consolidation after a week of heavy selling.
The support at 23,650 is reinforced by an ascending trendline on the weekly chart, making this level a key point to watch. A breach below this support level could lead to further selling pressure, potentially pushing the Nifty towards the 23,200 mark.
On the upside, if the Nifty sustains above the 23,950 level, it could trigger fresh buying activity, with 24,200 being the next key resistance level to monitor.
