Sensex, Nifty this week: From annual GDP data to bank loan growth, factors that may drive Dalal Street

The coming week marks the start of a new month and is expected to be a data-heavy week. India's annual GDP and banks' deposit and credit growth data will come out this coming week. Also, some prominent firms including Adani Transmission, Adani Ports, and IRCTC will declare their results during the week. 

Macro Economy: Market participants would be eyeing the data of India's GDP Annual Growth Rate which is scheduled to be released on May 31, 2023. The Indian economy expanded 4.4 per cent year-on-year in the three months to December of 2022, below 6.3 per cent in the three months to September, and forecasts of 4.6 per cent. Traders will also be looking forward to S&P Global Manufacturing PMI, scheduled to be released on June 1. 

The S&P Global India Manufacturing PMI increased to a four-month high of 57.2 in April 2023 from 56.4 in the previous month, beating market forecasts of 55.8, as both output and new orders grew the most in four months, amid sustaining expansions in sales. Further, banks' loan and deposit growth data will come out on June 2.

Major Results this week: Traders will be reacting to important earnings in the last leg of the result season starting with Adani Transmission, Campus Activewear, DCM, IRCTC, IPCA Laboratories, Jindal Poly Films, Jubilant Pharmova, Natco Pharma, NBCC, NHPC, NIIT, Rail Vikas Nigam, Adani Ports and Special Economic Zone, Apollo Hospitals Enterprise etc.

US market data: On the global front, investors would be eyeing a few economic data from the world’s largest economy, starting with House Price Index, CB Consumer Confidence, and Dallas Fed Manufacturing Index on May 30 followed by Redbook, Chicago PMI on May 31, API Crude Oil Stock Change, Initial Jobless Claims, S&P Global Manufacturing PMI, ISM Manufacturing PMI, ISM Manufacturing Employment on June 1, Unemployment Rate, Non-Farm Payrolls, Participation Rate, Average Hourly Earnings, Baker Hughes Total Rig Count on June 2.

Foreign Investment trends: Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that the NSDL data showed the FPI (Foreign portfolio investment) flows into India reached a nine-month high of Rs 37,316 crore in the month of May so far. "The sustained buying by FPIs has lifted the Nifty by 2.4 per cent in May. India is among the best-performing markets like Japan, Taiwan, South Korea, and Brazil while other markets, both developed and emerging, are struggling."

He said the foreign investors have been buyers across sectors. They invested in sectors like automobiles, capital goods, health care, Oil & gas, and telecom. Massive buying was witnessed in financial services, particularly banking. "Leading macro indicators in India like GST collections, PMI data, and credit growth suggest a resilient economy which can deliver 6 per cent GDP growth and mid-teen earnings growth in FY 24. The latest CPI inflation print (4.7 per cent in April) has come as a shot in the arm for markets," he said, adding that it was a clear indication that interest rates had peaked in India. "In this favourable macro setting, FPI flows are likely to continue supporting the market. A new record high for Nifty is possible. However, there is no scope for a sharp rally since valuations are not favourable at record levels."

Technical Outlook for Nifty: Rupak De, Senior Technical at LKP Securities, said: "Bulls have taken control of the Indian equities market, as the Nifty has experienced a consolidation breakout on the daily chart. The rally has been supported by the strength in Reliance, ITC, and IT stocks. The Nifty has been sustaining above a critical moving average, indicating a strong position. The trend is expected to remain positive as long as the index sustains above the support level of 18400. On the higher end, there is a resistance level at 18700."