At 8 AM, GIFT Nifty futures were trading at 25,774, down 10 points, indicating a flat or slightly negative start for Nifty-50 and BSE Sensex.
The Indian stock market may start the week on Monday with a slight pressure. Global signals remain positive, but the market's movement may be limited due to a slight decline in GIFT Nifty domestically. At 8 AM, GIFT Nifty futures were trading at 25,774, down 10 points, indicating a slightly negative start for the market.
Asian Markets Show Momentum
Asian markets witnessed strength on Monday. Investors kept a close eye on the latest economic data from Japan, South Korea, and China. Japan's Nikkei index rose by 1.6 percent, while the Topix index gained 1 percent. Korea's Kospi increased by 0.64 percent, and Australia's ASX 200 index was up by 0.19 percent. These figures indicated signs of improvement in major Asian economies.
China's June PMI data, which assesses construction activities, holds special importance for investors. If these figures come in better than expected, confidence and strength can increase in all emerging markets, including India.
Strong Performance by US Markets
US stock markets also saw a tremendous rally on Friday. The S&P 500 closed at 6,173.07, breaking its old record. The Nasdaq Composite also closed at a new high, with a gain of 0.5 percent. The Dow Jones rose by nearly 1 percent. This strength was driven by b consumer demand in the US, a rally in tech stocks, and positive economic data.
Business activities in the US surged in June, boosting investor confidence. However, the possibility of tension between the US and China over trade policy still remains, which may keep some caution.
Pre-Budget Figures to Determine Market Direction
In India, investors will be keeping an eye on the industrial production and manufacturing production figures for the month of May this week. These figures will provide insights into the country's economic situation and growth trends. Also, the activities of foreign institutional investors and the movement of the rupee against the US dollar will play a role in determining the market direction.
Furthermore, there is also a buzz in the market regarding the upcoming budget. Before the full budget, which will be presented in the first week of July, there is an atmosphere of anticipation in many sectors. The government is expected to introduce some incentive schemes for infrastructure, defense, IT, and manufacturing sectors.
Activity in the IPO Market
Investors' focus will be on the allotment of two IPOs today. The allotments of HDB Financial Services and Sambhav Steel Tubes IPOs have been finalized. Investors who applied for these IPOs can now check their status on the BSE, NSE, or the respective registrar's website.
The HDB Financial Services issue has been quite popular among investors, while Sambhav Steel Tubes has attracted midcap investors. The listing of these two issues is expected in the next few trading sessions, which may once again lead to activity in the small and midcap segments.
FII and DII Activity is Also Important
On Friday, there was significant buying by foreign institutional investors (FIIs) in the Indian market. Domestic institutional investors (DIIs) also maintained their investment strength. If these trends continue on Monday, the market is expected to get support. However, the slight decline in GIFT Nifty also indicates that investors may remain cautious in early trading.
Sectors to Watch Out For
IT, auto, banking, and metal sectors may be in special focus on Monday. The strength of tech stocks in the US market may affect IT stocks in India. Also, the June sales figures of auto companies may start coming out today, which will lead to activity in this sector.
Metal stocks will get direction from China's industrial data, while trading activity may continue in banking stocks in anticipation of potential announcements before the budget.
Crude Oil and Rupee Will Also Determine Direction
There is volatility in crude oil prices in the international market. If crude oil stays above $85 per barrel, it can be a matter of concern for an importer country like India. Also, the strength or weakness of the rupee against the dollar can affect the investment strategy of FIIs.
