Scholarship next week: Global stock markets, including India’s stock market, came under selling fire after year-on-year US inflation hit its highest level in the past four decades. After the RBI policy on Thursday, it looked like the secondary markets were poised for a resumption of positive momentum as the NSE Nifty and Bank Nifty indices reacted positively. However, as the event ended, the focus shifted to global indices, which led to a sell-off in stocks due to rising US bond yields.
According to stock market experts, global inflation may continue to affect stock markets globally, but there are some triggers they cannot afford to miss. They listed the 5 major triggers mentioned below for the stock market next week:
1]LIC IPO HDRP: Advise stock investors to keep an eye on developments related to LIC’s IPO as Life Insurance Corporation of India is expected to file its draft Red Herring Prospectus (DRHP); Avinash Gorakshkar, Head of Research at Profitmart Securities, said DRHP’s filing will clearly indicate LIC’s IPO size and other details. In this case, FIIs and DIIs would have to get their money back from the secondary markets in a calibrated way and keep it safe for the LIC IPO. In this case, the liquidity of the Indian stock market may be reduced for some time and the secondary market may trade sideways for some time. He said core investor money will have a one-month lock-up period after the LIC’s IPO date, so liquidity may remain restricted until then.
2]Russia Ukraine conflict: Avinash Gorakshkar of Profitmart Securities said that Russia has announced that it will attack Ukraine next week and that a single Russian rocket launch into Ukraine will be enough to send global markets plummeting, including the Indian stock market. He said the geopolitical tension could have an impact on the global economy, as the entire European economy would be affected by a single negative news regarding Russia and Ukraine.
3]Global inflation: Suggesting secondary market participants and investors to keep an eye on the development of global inflation next week, Anuj Gupta, vice president of IIFL Securities, said the inflation rate in the United States had recorded a strong year-on-year increase, which is the highest in the last 40 years. and this should also affect global inflation. Now, should the conflict between Russia and Ukraine escalate, crude oil is expected to soar to $100 a barrel in international markets. This will lead to a sharp escalation in global inflation, causing a negative impact on equity markets, as we have witnessed in the last 3 sessions of the past week.
4]Deviation of the Rupee from the Dollar: Anuj Gupta of IIFL Securities said the Indian National Rupee (INR) hit a one-week low yesterday when it hit the 75.58 levels. Moreover, it may test 75.80 to 76 levels soon. Thus, in the event of further depreciation of the Indian rupee, FIIs and REITs could continue to extract money from Indian stock markets.
5]Business Results: Expecting next week’s stock earnings to work as one of the main triggers for the stock market next week, Avinash Gorakshkar said a large number of listed companies are expected to announce their third-quarter results. In this case, stock-specific trades in large listed companies can be expected and traders are therefore advised to keep an eye on their favorite stocks and its results coming next week.
Warning: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.
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