News

Published: June 14, 2023
Updated: June 14, 2023

Key Triggers for Indian Stock Market: SGX Nifty and Inflation to IIP Data

Asian markets experienced positive momentum on Tuesday, buoyed by the anticipation of US inflation data and the upcoming Federal Reserve policy meeting. Additionally, favourable domestic macroeconomic indicators have contributed to an optimistic outlook for the Indian stock market. Let's delve into the details and explore the key factors driving market sentiment.

Optimism in Asian Markets Ahead of Key Events:

Asian markets traded higher, taking cues from the overnight rally on Wall Street, as investors eagerly awaited the release of US inflation data and the Federal Reserve's policy meeting. This positive sentiment has set the stage for potential market developments in the region.

Focus on Central Bank Rate Decisions and Domestic Data:

The European Central Bank and the Bank of Japan are set to announce their respective rate decisions later in the week, which adds to the market anticipation. Moreover, on the domestic front, favourable macroeconomic data, including a decline in retail inflation to a 25- month low in May and significant growth in India's industrial output in April, are contributing to market optimism.

Expectations Surrounding Central Bank Decisions:

Market participants are closely monitoring the interest rate decisions of central banks, including the US Federal Reserve, the European Central Bank, and the Bank of Japan. The expectation is that these central banks may opt for a pause in their rate hikes, which could have significant implications for market dynamics.

Asian Market Performance:

The Nikkei 225 in Japan experienced a 0.78% increase, reaching a new 2023-high, while the Topix recorded a gain of 0.61%. South Korea's Kospi rose by 0.43%, and the Kosdaq saw a 0.48% increase. However, Hong Kong's Hang Seng index futures showed a decline of over 40 points at 19,358. In Australia, the S&P/ASX 200 index eased slightly by 0.1%.

Positive Outlook for Indian Benchmark Indices:

The SGX Nifty, an indicator of the Indian benchmark indices, was trading higher, signalling a positive start for the Indian stock market. The market is closely watching India's inflation and Index of Industrial Production (IIP) numbers as key drivers of market sentiment.

US Market Performance:

Wall Street's major indices ended higher in anticipation of the inflation data and the Federal Reserve meeting. The S&P 500 closed 0.94% higher, the Nasdaq Composite rose by 1.53%, and the Dow Jones Industrial Average gained 0.56%.

European Market Highlights:

European markets showed gains, with German shares leading the way following a significant jump in Adidas stock. The STOXX 600 index closed 0.2% higher, while the FTSE 100 in Britain added 0.1%, Germany's DAX rose by 0.9%, and France's CAC 40 gained 0.5%.

Energy and Bullion Update:

Crude oil prices experienced a modest increase but remained close to a three-month low due to concerns about the demand outlook in China and the US. Meanwhile, gold prices edged higher as the dollar retraced its gains, with investors keeping a close eye on US inflation data and the Federal Reserve's interest rate decision.

The Indian stock market is poised for potential market movements as key triggers such as the SGX Nifty, inflation data, and the Index of Industrial Production take centre stage. Market participants are closely watching global central bank decisions, particularly the US Federal Reserve, for potential shifts in interest rate policies. As these events unfold, investors should stay informed and adapt their strategies.