The domestic stock market, which is at a record high, will focus on the announcement of macroeconomic data, the development of global stocks and the Federal Reserve’s minutes to set the direction ahead, analysts said.
Trading activity by foreign institutional investors (FIIs) will also affect investors.
On the domestic macro front, Purchasing Managers’ Index (PMI) data will be released for manufacturing on Monday and services on Wednesday.
Investors will keep a close eye on key global market events this week, including the results of the Federal Open Market Committee (FOMC) minutes, which are due to be released on Wednesday.
“This week the market will be guided by the economic data that will be released both locally and globally. “Investors should also pay attention to the FOMC minutes for insight into the future direction of the US Federal Reserve,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Auto stocks will be the focus on Monday after reporting their June sales data on Saturday.
In global markets, investors will be keeping a close eye on developments in crude oil prices, the dollar index and US bond yields, said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.
“On the Marco front, between July 3rd and July 7th, the global services PMI, US nonfarm payrolls data and the unemployment rate will be aligned. Additionally, institutional activity will also have a significant impact on market trends,” Gour added.
Last week, the BSE benchmark rose 1,739.19 points, or 2.76 percent, and the Nifty climbed 523.55 points, or 2.80 percent.
On Friday, the 30-stock BSE Sensex was up 803.14 points, or 1.26 percent, to hit its end-of-life high of 64,718.56. On the day, it rose 853.16 points, or 1.33 percent, to hit its record intraday high of 64,768.58.
The NSE Nifty climbed 216.95 points, or 1.14 percent, to close at a record high of 19,189.05. On the day, it rose 229.6 points, or 1.21 percent, to hit its all-time intraday high of 19,201.70.
Market analysts said factors that fueled the market rally last week included increased buying by overseas investors, a revival in monsoons and the positive impact of HDFC merger updates, among others.
“The market’s bullish momentum was further supported by strong inflows from FIIs, HDFC’s merger update and a narrowing current account deficit. Global investor confidence was boosted by favorable revisions to US Q1 GDP, a decline in jobless claims and positive results from the Fed’s US bank stress test,” said Vinod Nair, director of research at Geojit Financial Services.
Meanwhile, HDFC Ltd, the parent company of the country’s largest private lender, merged with HDFC Bank on Saturday, with the boards of both companies approving the plan first unveiled on April 4 last year.
India’s manufacturing and services PMI data will take center stage this week, said Arvinder Singh Nanda, senior vice president, Master Capital Services Ltd.
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