Bull versus bearish: Due to the weakness in global indices, the bear continued to maintain its grip on Dalal Street, dragging the Nifty 50 index back below 16,000 levels. Bears had a complete grip on the Indian stock market throughout the week as minor pullbacks were sold out within minutes and Nifty lost nearly 4% over the week and ended below 15 800 levels. Interestingly, in this weak market, most positions built by FIIs are short and their “Long Short Ratio” in the index futures segment is at an all-time low not seen in a while. time. Sector indices have not yet shown any signs of reversals or bottoms either.
Advising investors to avoid any kind of rush and conclude on the bottom of the market, Ruchit Jain, Lead Research at 5paisa.com, said: “Sector indices have not yet shown any signs of reversal or bottom. . The banking index showed some relative strength. at the beginning of the week but finally it resumed the downward trend on the weekly expiry day and the day after tomorrow. Thus, there too the trend remains negative and as there is no divergence seen yet, you should not be in a hurry to fish background. “
Speaking on the main triggers that could dictate the stock market next week, Anuj Gupta, Vice President – Research at IIFL Securities, said: “The week ending Friday was the worst in two years. The dollar index hit a 20-year high and crashing as commodity prices were a major reason for the stock market crash this week.These two are expected to continue to dictate global markets, including Dalal Street next week as well.One should also keep an eye on the company’s upcoming results.
Here we list the top 5 triggers that could dictate the stock market next week:
1]Dollar index: The dollar index’s impressive surge continued this month and the index hit its highest level in 230 years this week. Thus, investors extract money from stocks and other investment instruments and pump money into US dollars. Thus, the movement of the index will be crucial in the immediate future and hence investors and traders are advised to keep a close eye on the dollar index.
2]Commodity price crash: “Commodity prices suddenly crashed last week, sending metal stocks tumbling. Stocks like SAIL, VEDL and HINDALCO were the worst performing stocks in the previous week. The direction of commodity prices and the continued volatility will decide the fate of the metals and related sectors,” said Sonam Srivastava, founder of Wright Research.
3]Rupee against dollar: “Last week, the Indian National Rupee (INR) fell to a record low, triggering further selling by FIIs. Rupee-Dollar spreads are an important factor that could dictate the stock market on the week.” said Anuj Gupta of IIFL Security.
4]US Retail Sales Data: This will directly affect the US dollar and any decline in the dollar could trigger dollar profits. Thus, US retail sales data is an important factor that could impact the stock market next week.
5]Q4 results: “We are in the middle of the earnings season. Many companies including IOC, DLF, ITC, Lupin, etc. will release earnings next week, which could decide the fate of many sectors,” said Sonam Srivastava of WrightResearch.
Warning: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.