Rupee movement, macro-data insight to drive equity market

Mumbai: The Indian rupee’s movement, coupled with fluctuations in global crude oil prices, are expected to drive investor sentiments on the key domestic equity indices during the upcoming week.

Besides, equity market participants will monitor the monthly automobile sales data along with production figures for eight core industries (ECI) in June and the direction of foreign fund flows to gauge economic performance.

“The next week will be dominated by global markets’ sentiments, especially in the emerging markets and their currencies, the Indian rupee’s movements and the RBI (Reserve Bank of India) r government’s actions on this will be closely monitored,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.

“The sentiments towards sectors deriving USD revenue are expected to be positive. The large cap and quality bias in stock markets would continue, with the mid and small caps valuations not attractive enough for nibbling. Any fresh salvos fired in the ongoing global trade wars could dampen the sentiment.”

Lately, high crude oil prices and geopolitical developments have weakened the Indian rupee, which depreciated to touch its all-time low during the week just ended at the 69 per US dollar mark.

It closed at 68.47, weaker by 63 paise from its previous week’s close of 67.84 per greenback.

“Over the next couple of months, USD/INR may build a base between 67 and 69 on spot, before heading towards 71/72 before the FY19 draws to a close. Over the next week, a range of 67.80 to 68.80 can play out,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 1,380.94 crore during the week under review.

Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) invested in equities worth Rs 528.41 crore, or $79.66 million, in the week ended on June 29.

Apart from the rupee’s movement, investor sentiments will be driven by the monthly automobile sales figures as well as the ECI data and purchasing mangers index (PMI) readings.

On technical charts, further upsides are seen in the National Stock Exchange (NSE) Nifty 50 during the initial period of next week.

“Technically, with the Nifty holding above the crucial supports of 10,550 points and bouncing back smartly on Friday, the bulls do seem to have an upper hand for the initial part of the coming week,” said Deepak Jasani, Head of Retail Research for HDFC Securities.

“Further upsides are likely once the immediate resistances of 10,733 points level are taken out. Crucial supports to watch for any weakness are at 10,612 points.”

On a weekly basis, both the key Indian equity indices — S&P Bombat Stock Exchange (BSE) Sensitive Index (Sensex) and NSE Nifty 50 — declined for the first time in last five-weeks, as escalating trade war concerns along with rising crude oil prices and a weak Indian rupee eroded investor sentiments.

Consequently, the barometer 30-scrip Sensex of the BSE fell by 266.12 points or 0.75 per cent to close at 35,423.48 points.

Similarly, the wider Nifty50 of the NSE closed the week in the red. It ended at 10,714.30 points — down 107.55 points or 0.99 per cent — from its previous close.

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