“The upcoming week will place a significant focus on monetary policy, as the Fed will begin its two-day policy meeting on March 19. The US Federal Reserve (FED) will announce its interest rate decision after its two-day policy meeting on March 20, 2024. According to reports, the US Federal Reserve will leave its benchmark overnight interest rate unchanged,” Pravesh Gour, Senior Technical Analyst at Swastika Investmart said.
Factors that are likely to impact movement when markets reopen this week:
1) FOMC
The rate setting committee of the US Federal Reserve – the Federal Open Market Committee (FOMC) will assemble on March 19, 2024, Tuesday to decide on policy rates giving a direction on the economy and inflation. Street would be keenly watching the commentary on the timing of the interest rate cuts.
2) US Markets
Handover from the US markets was strong with major headline indices on the Wall Street ending higher on Friday. While Dow 30 ended at 38,905.70, down by 137.66 or 0.35%, S&P 500 settled at 5,150.48, lower by 14.83 points or 0.29%. Meanwhile, Nasdaq Composite declined by over 49.24 points or 0.30% to end at 16,128.50 on Friday.
When Indian markets reopen on Monday, they will take cues from the Friday closing of the US markets. They will also track movement in GIFT Nifty futures on Monday. The latter is an early indicator of movement in the Nifty50.
3) Rupee Vs Dollar
The Indian rupee closed lower on Friday at 82.8775 against the US dollar, down from its close of 82.8175 in the previous session after US bond yields surged in light of data that signalled inflation in the world’s largest economy could be sticky. The local unit notched a weekly loss of about 0.1%, its first week-on-week decline since mid-February.
“Indian rupee is expected to be in range of 82.70 to 83.00 next week as inflows continue while RBI and importers lap up the dollars to hedge near term payables while RBI protects any major appreciation to help exporters,” Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP said.
4) Corporate Action
Monday, March 18 will be ex date and record date for interim dividend of Oil India; March 19 will be ex date and record date for interim dividend of Sudarshan Chemical Industries, TVS Motor Company and KEI Industries and 2:1 bonus share of Rama Steel Tubes. March 20 will be the ex date and record date for bonus share Nupur Recyclers and Paisalo Digital. 5) Technical Factors
In Nifty, on the daily charts, the prices managed to hold on to the support zone of 21,900–21,860, Arvinder Singh Nanda, Senior Vice President, of Master Capital Services said as he sees the broader index to likely face hurdle at 22,250-22,350 in the coming sessions, with support at 21900-21800. “The short-term and the near-term trends of Nifty remain weak. A decisive move below 21,850 could open sharp weakness down to the next lower support of 21,450 levels in the near term,” Nanda said.
As for Bank Nifty, strong support is currently placed at the 46,200 levels and resistance at 47,200 levels, the Master Capital Services analyst said.
6) FII / DII Action
The foreign institutional investors (FIIs) were net buyers of Indian equities and purchased shares worth Rs 848.56 crore on Friday while the domestic institutional investors (DIIs) were net sellers at Rs 682.26 crore.
7) IPO Action
The primary market takes a breather in the mainboard segment with no new issues opening next week, while the SME segment keeps ticking as 2 companies set to launch their public offers.
In the last week, two mainboard IPOs of Popular Vehicles and Services and Krystal Integrated Services opened for subscription with an aim to raise Rs 901 crore.
Apart from two new SME IPOs, the Street will see as many as 9 listings including that of Popular Vehicles and Krystal Integrated Services.
While the public offer of Popular Vehicles received subscription of 1.23 at close, Krystal Integrated’s issue is still open for public to bid till March 18.
8) Crude Oil
Oil prices dipped on Friday, a day after topping $85 a barrel for the first time since November, but prices finished nearly 3% higher for the week on rising demand from US refiners completing planned overhauls.
On the Comex, the US WTI crude oil futures settled at $81.010, down by $0.260 or 0.320% while Brent oil closed at $85.280, lower by $0.070 or 0.080%. Meanwhile, on the MCX, the March contract finished at Rs 6730 per BBL, up by Rs 10 or 0.15%.
Oil prices are critical to Indian macros and inflation.
9) Bond Yields
Indian government bond yields inched higher to wrap up the week, which also witnessed the first upward move after four consecutive weeks of fall, mirroring a momentum in Treasury yields, though with a lower magnitude, Reuters reported. The benchmark 10-year yield ended at 7.0644%, following its previous close of 7.0401%. The yield rose three basis points (bps) this week, after easing by an aggregate of 8 basis points in the last four weeks.
“There was some selling pressure this week tracking a rise in U.S. yields, still the movement would be very subdued, even if the 10-year yield moves towards the 4.50% mark,” this report said quoting VRC Reddy, treasury head at Karur Vysya Bank.
US yields jumped this week, with the 10-year yield rising as much as 25 bps for the week’s lowest point to trade around the 4.30% handle.
10) Global Macros
This week will be critical in view of the data being published in the US, UK and other major economies. In the US, NAHB housing Index data, S&P Global US Manufacturing PMI, S&P Global Composite PMI and S&P Global Services PMI (Mar) will be announced. In the UK, core retail sales and retail sales numbers and house price index will be declared. In the Eurozone, CPI numbers will be announced.
In China, the 5-year loan prime rate will be announced.
As for India, S&P Global India Manufacturing PMI and S&P Global India Services PMI data will be announced.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
