Mumbai: The arrival of monsoon rains in Kerala on Saturday, as announced by the Indian Meteorological Department, is likely to cheer the market while the rise in crude oil price and trade war between the US and China are likely to keep the market on high alert against any possible negative impact on the economy.
Last week, the Nifty-50 witnessed profit booking from the all-time high (12103.05) post-the RBI monetary policy, snapping three weeks winning streak to close at 11,870 levels, down by 0.4 per cent on a weekly basis. The broader market also witnessed profit booking as the Nifty Mid-cap and Small-cap indices closed lower by 1 per cent and 1.7 per cent, respectively.
Asian and Indian market will take comfort from the US market closing higher on Friday as the Nasdaq was up 1.66 per cent and the Dow and S&P 500 were up 1.02 and 1.05 per cent, respectively.
The US Job data report for May fuelled hopes of a rate cut by the Federal Reserve. The US economy created 75,000 new jobs in May, well below 1,85,000 predicted by economists.
Monsoon arrival and its advance as the week progresses is likely to cheer agri-input stocks.
Monthly inflation and industrial production data (Wednesday), Budget related developments this week will be other triggers for the market.
Vinod Nair, Head of Research at Geojit Financial Services, said, "Going ahead market is expected to trade based on key macro data like inflation and industrial production. Inflation is expected to be slightly on the higher side based on rise in food prices but to remain under the range provided by RBI. Industrial growth (IIP) is expected to show some slight growth. How monsoon pans out will also be in focus as the latest estimates provided by IMD indicate monsoon will arrive late.”
“Market is expected to be volatile and given the limited headroom in valuation,” Nair said.
Dharmesh Shah, Head-Technical, ICICI ,Direct said, "We believe index would undergo healthy consolidation in the broad range of 11600–12000 and form a higher base for the next leg of up move.”