Key factors driving stock market next week include RBI MPC decision, PMI data, FII activity, and global economic indicators

In the upcoming week, the Indian stock market is poised for critical developments influenced by both local and global factors. The Reserve Bank of India’s Monetary Policy Committee (MPC) meeting, the Purchasing Managers’ Index (PMI) data, Foreign Institutional Investors (FII) activity, and various global economic indicators are expected to shape market sentiment.

On the domestic front, the S&P Global Manufacturing PMI data for India is scheduled to be released on June 2, offering valuable insights into the country’s manufacturing sector’s health. The RBI’s MPC gathering is set to commence on June 4, with the announcement of its outcomes slated for June 6. The MPC’s stance on interest rates will serve as a pivotal driver for market movements. In addition to these events, the US is anticipated to unveil its PMI data on June 2, alongside crucial statistics on non-farm payrolls and May’s unemployment figures set to be shared by the US government on June 6.

During the trading week of May 26 to May 30, the Indian stock market witnessed a period of consolidation with minor declines in benchmark indices. The Nifty and Sensex yielded around a 0.40% decrease, concluding at 24,750 and 81,451, respectively. Despite this downturn, the Nifty Bank index managed to close 0.63% higher, driven by notable upticks in PSU bank shares, which surged by nearly 4%. Conversely, FMCG stocks experienced selling pressures, leading to a decline of approximately 2% in the Nifty FMCG index.

In the cash segment, foreign institutional investors (FIIs) divested stocks worth around Rs 418 crore. In contrast, domestic institutional investors (DIIs) displayed confidence by injecting over Rs 33,000 crore during the same period. Puneet Singhania, Director at Master Trust Group, observed that although the Nifty marked its second consecutive week in the red, remaining below the 25,000 level, it still stands above its 21-day moving average. Singhania pointed out that the Nifty’s substantial support level lies at 24,500, expressing that a breach below this could potentially pull the index down to approximately 24,200, while 25,000 stands as a crucial resistance level on the upside.

As investors eagerly await these imminent developments, the stock market landscape is poised for significant shifts based on these upcoming events and fundamental economic indicators.