stock market next week Global equity markets, including India’s stock market, have been in the grip of sell-off since US inflation rose to the highest year-on-year in the past four decades. After the RBI policy on Thursday, it looked like the secondary markets were set to resume positive momentum as the NSE Nifty and Bank Nifty indices reacted positively. However, as the event ended, the focus shifted back to global cues, which saw a selloff in equities on rising US bond yields.
According to stock market experts, global inflation may continue to impact equity markets globally, but there are certain triggers which they cannot afford to miss. He listed below 5 major triggers for the stock market next week:
1]LIC IPO DRHP: Advising stock market investors to monitor developments related to LIC IPO as Life Insurance Corporation of India is expected to file its Draft Red Herring Prospectus (DRHP); Avinash Gorakshakar, head of research, Profitmart Securities, said the filing of the DRHP would make it clear about the LIC IPO size and other details. In that case, FIIs and DIIs are expected to withdraw their money from the secondary markets in a calibrated manner and reserve the same for LIC IPO. In that case, the liquidity in the Indian stock market may remain low for some time and the secondary market may trade sideways for some time. He added that there will be a lock-in period of one month in the money of anchor investors after the date of LIC IPO listing, hence, liquidity can be squeezed till this period.
2]Russia Ukraine Conflict: Avinash Gorakshakar of Profitmart Securities said Russia has announced an attack on Ukraine next week and a Russian rocket launch on Ukraine would be enough to cause a fall in global markets, including India’s stock market. He said geopolitical tensions could affect the global economy as the entire European economy would be affected by the single negative Russia Ukraine news.
3]Global Inflation: Suggesting secondary market players and investors to keep an eye on global inflation next week, IIFL Securities Vice President Anuj Gupta said the US inflation rate has risen sharply year-on-year, which is the highest in the last 40 years. is more. And it is expected to impact global inflation as well. Now, in case of escalation in the Russia-Ukraine conflict, crude is expected to rise sharply and reach $100 a barrel in international markets. This will lead to a sharp rise in global inflation which will have a negative impact on the equity markets as we saw in the last 3 sessions last week.
4]Rupee Vs Dollar Divergence: Anuj Gupta of IIFL Securities said that the Indian National Rupee (INR) hit a one-week low yesterday when it touched the level of 75.58. Further it may test the 75.80 to 76 level soon. Therefore, in case of further depreciation in the Indian rupee, FIIs and FPIs can withdraw money from the Indian equity markets.
5]Company Results: Avinash Gorakshakar said the stock market earnings next week will act as one of the major triggers in the stock market next week, adding that a large number of listed companies are expected to announce third quarter results. In that case, some stock specific trading can be expected in the big ticket sized listed companies and hence traders are advised to keep an eye on their preferred stock and its upcoming results next week.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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