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The Indian stock market is likely to open lower on Monday, mirroring the cautious mood in global markets. Despite ending higher on Friday, Sensex and Nifty 50 experienced over 2% losses for the week, driven by heavy Foreign Institutional Investor (FII) selling and election-related concerns.
Market cues driving the lower opening
- Weak Asian cues: Asian markets, particularly China, set the tone for a negative start. China’s inflation data and other economic indicators are raising concerns among investors.
- Profit booking after weekly losses: Despite a positive close on Friday, Sensex and Nifty 50 witnessed weekly losses exceeding 2%. Heavy selling by Foreign Institutional Investors (FIIs) and election-related anxieties contributed to this decline.
Domestic and global factors to watch:
- Q4 earnings season: Investors remain focused on the ongoing release of company results for the fourth quarter (Q4). These results will provide valuable insights into corporate performance and future outlooks.
- India’s retail inflation data: Upcoming retail inflation data for India will be closely monitored for its impact on market sentiment.
- Macroeconomic trends: Domestic and global macroeconomic trends, including interest rate policies, economic growth indicators, and geopolitical tensions, will influence investor decisions.
- Foreign capital flows: Fluctuations in foreign capital flows, particularly FII activity, can significantly impact Indian stock prices.
- Crude oil prices: Oil prices play a crucial role in influencing inflation and corporate earnings. Recent declines in oil prices offer some relief, but further developments will be watched closely.
Key market indicators:
- Asian markets: The Japanese Nikkei 225 and Topix indices fell, while South Korea’s Kospi saw a slight gain. Hong Kong’s Hang Seng index futures also suggest a weak opening.
- Gift Nifty today: Gift Nifty, an indicator of the upcoming session, traded around 22,095 levels, signaling a potentially negative start for Sensex and Nifty 50.
- Wall street performance: US stocks ended with a mixed bag on Friday. While the Dow Jones Industrial Average and S&P 500 gained, the Nasdaq Composite closed lower.
- US consumer sentiment: A decline in US consumer sentiment to a six-month low in May reflects ongoing economic uncertainties.
- US Fed policy stance: Although Federal Reserve officials acknowledge signs of a slowing economy, the timing of potential rate cuts remains unclear.
- China inflation: China’s consumer prices witnessed a third consecutive monthly rise in April, while producer prices showed continued decline.
- India’s Industrial Production: India’s Index of Industrial Production (IIP) growth rate slowed down to 4.9% in March compared to 5.7% in February.
You can make well-rounded investment decisions and adjust your strategies to navigate market volatility effectively. A comprehensive understanding of domestic and global factors influencing the Indian market is essential for successful investing.