Despite a sharp fall on Friday at the US bourses, the Indian stock markets are likely to open the fresh week on stable note. The SGX NIfty at 16,520 (730 am) indicates a gap down opening of 90 points for Nifty, as Nifty June futures on Friday closed at 16,610.

SGX Nifty, which dipped to a low of 16,476 in early deal, has been recovering in early deal on Monday.

Experts said the volatility to hurt the markets, especially in the later part of the day. Analysts expect the market to driven by global events and RBI monetary policy, which is scheduled for June 6-8.

Joseph Thomas, Head of Research, Emkay Wealth Management, said the local markets are waiting for the outcome of the RBI monetary policy, and the FOMC meeting by mid-June. The likelihood of rate action as well as liquidity reduction measuresmight affect the economic growth owing to high inflation and its consequences for consumption spending.

Asian stocks mixed

The US stocks, led by Nasdaq plunged sharply on Friday amid fears of impending rate hike following a strong employment data. While the Nasdaq plunged nearly 2.5 per cent, the Dow and S&P 500 edged down 1 per cent and 1.6 per cent, respectively. However, futures of these stocks are up in early deal on Monday.

Cues from the Asia-Pacific are mixed with Japan, Korea and Chinese markets gaining even as Taiwan and Australian stocks are ruling weak.

FII selling hurts sentiment

"The Indian equities will likely see another tumultuous week as the central bank would take its strict stance in an attempt to curb inflationary pressures," said Mitul Shah- Head of Research at Reliance securities. The continued selling by FIIs and plunging rupee are likely to have economic implications in the near term. "Globally, the Russia-Ukraine crisis and supply chain disruptions continue to impact global and Indian equities," he added.

Ruchit Jain, Lead Research, 5paisa.com, said As far as Nifty levels are concerned, 16,750-16,850 will be seen as a major resistance zone now and the immediate support is placed around 16,450-16,400. "Once this support is breached, our markets could go correct towards 16,200-16,000 in a short period of time," he said, adding traders should also be vigilant on the global markets and the US Dollar index which has shown signs of an up move again after the recent corrective phase. "Since our markets have recently seen high negative correlation with this index, any upmove in this index could be a factor to worry for," he cautioned.

Published on June 6, 2022