Market Outlook: Key Triggers for Next Week – PMI, FIIs, and Global Economic Data

New Delhi: The market outlook for the upcoming week will be shaped by several key domestic and global economic indicators. Investors are likely to focus on PMI data, Foreign Institutional Investments (FIIs), as well as crucial updates from the Indian banking sector. International economic data, including US home sales, jobless claims, and UK GDP for Q4, will also play a pivotal role in guiding market sentiment.

Key Domestic Data Points to Watch

1. India’s Composite PMI for March
India’s Composite PMI preliminary data for March will be released on Monday. This is an essential economic indicator as it provides insights into manufacturing and services business activities in the country. The Composite PMI data plays a significant role in shaping market sentiment and is likely to influence investor decisions.

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2. Bank Loan Growth and Deposit Growth
On Friday, the Reserve Bank of India (RBI) will release data on India’s bank loan and deposit growth. These figures are crucial for assessing the health of the country’s financial sector and will be closely watched by market participants for any signs of economic strength or weakness.

Global Economic Data to Impact Market Sentiment

1. US New Home Sales for February
On Tuesday, the US will release its New Home Sales MoM data for February. This data will provide insights into the US housing market and broader economic trends, which could impact global market movements.

2. US Initial Jobless Claims and Corporate Profits
The US Initial Jobless Claims data for the upcoming week, along with Q4 Corporate Profits (QoQ) data, will offer a snapshot of the health of the US labor market and corporate earnings, influencing market outlook.

3. UK GDP Data for Q4
Friday will also see the release of the UK GDP data for Q4, which is another crucial indicator for global economic trends. The performance of the UK economy will be closely watched by investors for any potential ripple effects on global markets.

Market Performance and Foreign Institutional Investments (FIIs)

Last week, Indian stock markets saw a positive rally, with Nifty closing 4.26% higher at 23,350.40 and Sensex rising 4.17% to close at 76,905.51. This rally was largely driven by financial stocks, with the Nifty Bank Index increasing by 5.27% and the Nifty Financial Services Index rising 5.49%.

Midcap and smallcap stocks also saw significant buying activity. The Nifty Midcap Index rose by 7.8%, while the Nifty Smallcap Index gained 8.5% during the period from March 17-21.

Foreign Institutional Investors (FIIs) were net buyers last week, with an investment of Rs 5,819 crore in equities. Domestic Institutional Investors (DIIs) also participated actively, investing Rs 4,337.80 crore in equity markets.

Outlook for the Nifty and Key Levels to Watch

Puneet Singhania, Director at Master Trust Group, noted that Nifty gained in all five sessions of the week, reaching a six-week high. The market closed above the 21-day and 55-day Exponential Moving Averages (EMAs), indicating a favorable environment for a buy-on-dip strategy.

For the near term, Singhania highlighted key support at the 55-day EMA level of 23,050. If this support is breached, a decline towards 22,700 could be seen. On the upside, resistance at 22,500 remains crucial, with a breakout potentially pushing prices toward 22,800.

Conclusion: Factors Driving Next Week’s Market Outlook

The market next week will be heavily influenced by domestic PMI data, RBI’s banking sector statistics, and key international economic indicators. Investors are likely to remain vigilant as they monitor these developments, particularly FIIs’ behavior and the overall global economic landscape.