Indian Stock Market to Decline Next Week

Indian stock market may decline next week. According to analysts, this week the market will watch US Q1CY23 GDP growth, the monsoon, FII inflows, and global trends.

Effect of the monsoon

The stock market will also monitor the South-West monsoon. This will prove very significant for both the Reserve Bank’s inflation outlook and the country’s economy. Due to the Biparjoy cyclone, the monsoon reached Kerala’s coast on June 8 instead of June 1. However, conditions are now favorable for the Southwest Monsoon, and it has reached many states.

Reserve Bank of India (RBI) governor Shaktikanta Das expressed concern over the monsoon delay. He said that international food prices like rice and sugar are already skyrocketing, and due to adverse weather, inflation may increase further.

Oil prices

The possibility of an increase in interest rates may reduce crude oil demand. Due to such concerns, oil prices internationally are stable and narrow. This is a favorable situation for India, a crude-importing country. Brent crude futures prices remained below $80 for the fifth consecutive week. It was 73.6 barrels per dollar, a decline of 4.5% from last week.

Senior Analyst, Commodities, HDFC Securities, S. Gandhi, said, “The possibility of an increase in interest rates has increased concerns about the economic slowdown, and its impact can also be seen on crude oil demand.”

US Q1CY23 GDP Growth

Globally, investors will eye US GDP growth data for the first quarter (Q1CY23) of the current calendar year. Other estimates projected US GDP growth to decline to 1.3%.

US GDP growth in the fourth and third quarters of calendar year 2022 was 2.6% and 3.2%. Federal Reserve Chairman Jerome Powell will speak on June 28–29, and investors will watch closely. He has already indicated a further interest rate hike.

Indian Stock Market to Decline Next Week

News: IPOs will also be monitored. Three IPOs will be launched next week. These include Ideaforge Technology, Cyient DLM, and PKH Ventures. There is a plan to raise Rs 1,500 crore from these companies’ IPO. IdeaForge’s IPO will open on June 26 with a Rs 638-672 price band. The issue will close on June 29.

The IPO of Cyient DLM, a electronic manufacturing and services company, will open on June 27 and close on June 30. Its price band is Rs 250–265 per share. The IPO of construction company PKH Ventures will come on June 30 and run till July 4.

Companies like Bajaj Auto, Bajaj Finance, Bank of Baroda, Escorts Kubota, Can Fin Homes, Tata Communications, Welspun India, SKF India, Aegis Logistics, GSK Pharma, Sona BLW Precision Forgings, and Syngene International will ‘ex-dividend’ in the coming week.

More Updates:

The US Federal Reserve is expected to raise interest rates by 0.75 percentage points next week, which could lead to a sell-off in global markets. This would also hurt the Indian stock market, as Indian stocks are sensitive to changes in global interest rates.

The global economic outlook is uncertain, as the US and Europe are facing recession risks. This could lead to a decline in demand for Indian exports, which would hurt the Indian economy.

Indian stock market is likely to be volatile next week, and investors should be prepared for further declines. However, there are some positive signs, such as strong corporate earnings and the government’s commitment to fiscal stimulus. These factors could support the market in the long term.

Here are some tips for investors looking to protect their portfolios next week:

• Reduce your exposure to risky assets: This includes stocks, commodities, and cryptocurrencies.

• Increase your cash holdings: This will give you more flexibility to buy stocks when prices are low.

• Focus on defensive stocks: These are stocks less sensitive to economic fluctuations, such as utilities and consumer staples.

• Stay informed about market news: This will help you make informed investment decisions.