Stock Market Prediction Next Week: Indian stock markets made a decent gain during the week that ended on 26 May 2023. The market sentiments were upbeat due to institutional buying, as FIIs and DIIs both were net buyers for the week. The healthy quarterly earnings, rally in IT stocks, and optimism in US debt ceiling talks together have supported the local markets for the week that ended last Friday.
In the coming week, the market’s focus will be on the domestic economic data and the US debt ceiling talks. The GDP number is expected on 31st May while the US debt ceiling talks need to conclude maximum by the next weekend to avoid US default. The other key factors that are likely to impact the stock market prediction are given below.
Stock Market Prediction Next Week (29 May- 2 June 2023)
Nifty & Bank Nifty Prediction
The Nifty index has witnessed a strong recovery from the 18200 levels with bias turning positive and breaching above the crucial barrier of the 18400 levels has further strengthened the overall trend anticipating an up move in the coming days.
The near-term upside targets of 18800-18900 levels are open now for Nifty with most of the frontline stocks well placed and indicating improvement in the bias. The Nifty index could trade in a range of 18100 -18900 levels in the coming week.
Bank Nifty also ended above the 44000 zone to indicate positive bias and sentiment anticipating a decisive breach above the previous high of 44150 levels and opening the door for next targets of 46000-46400 levels. On a weekly basis, Bank Nifty would have a range of 42800-45500 levels.
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Macroeconomic Data
India’s Gross Domestic Products (GDP) number is expected next week. According to market experts, the Indian economy is expected to have grown by 5.5% during the last quarter of FY 2022-23, despite multiple global turmoils. The country’s GDP is expected higher than the 4.4% recorded in the previous quarter.
According to market experts, SBI research report, and RBI governor Saktikanta Das, the Indian GDP growth rate in the fiscal year 2023 is likely to be higher than the first advance estimate of 7% done by the National Statistical Office (NSO).
The market will react positively if GDP numbers come to 7% and above and vice versa. The other economic data that are likely to influence the market are GST collections for May and PMI manufacturing data. The schedule for key macroeconomic data for next week is given below.
| Economic Data Next Week | |
| 31 May 2023 | Govt Budget Value Mar & April |
| 31 May 2023 | GDP Growth Rate Q4, and FY2022-23 |
| 31 May 2023 | Infrastructure Output April |
| 1st June 2023 | S&P Global PMI Manufacturing |
| 2nd June 2023 | Foreign Exchange Reserves |
| 2nd June 2023 | Bank loan and Deposit growth |
Auto Sales Numbers
Auto stocks will be in focus next week as auto companies will start announcing the monthly sales numbers from 1st June onwards. Automobile stocks are in demand, as vehicles made bumper sales in the last year. The Nifty auto index gained over 8% in May and made around a 27% rally over the course of one year.
According to market experts, domestic passenger vehicle sales, especially those of SUVs, are expected to remain strong this fiscal despite the pent-up demand and low inventory which drove up sales in the past no longer there. Auto sales in May will continue to remain strong and the stocks will react as per the sales number.
Q4 Earnings
We are in the last leg of the Q4 corporate earnings, most of the Nifty 50 companies have announced their last quarter earnings. The nifty 50 indexes will conclude its Q4 earning season with Adani ports and Apollo Hospital next week. The are 100 plus mid and small-cap companies that will release their Q4 earnings in the coming week.
So far, the last quarter’s earning season was mostly in line with the expectation and quite encouraging. Other than tech companies, the banking, financial, and automobile sectors have announced strong earnings and supported the markets in the last 45 days.
The oil & gas sector has reported the quarterly results above estimates. We expect the remaining companies will also announce their Q4 earnings in line with the expectation and support the markets next week.
Global Stock Market Prediction Next Week
The global stock markets closed mixed during the week. The market sentiments were dampened due to lingering ongoing US debt ceiling talks. However, on Friday US markets rallied on optimism to reach the US debt ceiling agreement at the final stage and ignored the weak economic data.
The European markets were closed lower as investors were concerned about the economic outlook after German entered into a technical recession. Japanese markets gained due to upbeat economic data and strong earnings while China and Hang Seng were down due to concern about slow economic recovery.
In the coming week, global markets will focus on US debt ceiling talks, as the agreement needs to sign within the 5th of June to avoid US default. The global markets are expected to see a rally after the deal is reached. Other than the US debt ceiling, the PMI numbers, the US unemployment rate, and the inflation rate in Europe are likely to impact the stock market prediction next week.
Global Macroeconomic Data
| Important Global Macro Data Next Week | ||
| 30 May 2023 | Unemployment Rate | Japan |
| 30 May 2023 | Economic Sentiment May | EA |
| 30 May 2023 | Inflation, Consumer Confidence, Ind & Services | EA |
| 30 May 2023 | House Price Index Mar | US |
| 30 May 2023 | CB Consumer Confidence May | US |
| 31 May 2023 | Retail Sales & Industrial Production April | Japan |
| 31 May 2023 | NBS PMI Manfg, Non-Manfg May | China |
| 31 May 2023 | Consumer Confidence May | Japan |
| 31 May 2023 | House Starts April | Japan |
| 31 May 2023 | JOLTs Job opening April | US |
| 1 June 2023 | Jibun Bank Manufacturing PMI May | Japan |
| 1 June 2023 | Ciaxin Manufacturing PMI May | China |
| 1 June 2023 | HCOB Manufacturing PMI May | EA |
| 1 June 2023 | S&P Global/CIPS Manufacturing PMI May | GB |
| 1 June 2023 | Unemployment Rate April | EA |
| 1 June 2023 | Inflation Rate May | EA |
| 1 June 2023 | Initial Jobless Claim | US |
| 1 June 2023 | S&P Global & ISM Manufacturing PMI | US |
| 2 June 2023 | Unemployment Rate May | US |
Crude Oil Prices
Crude oil prices ended more than 1% higher on Friday as U.S. officials are almost close to striking a debt-ceiling deal. While the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting. On a weekly basis, both benchmarks reported a second week of gains with Brent gaining 1.7%, while WTI was up 1.6%.
The economic data released on Friday showed inflation is rising and this fueled fresh worries about the Federal Reserves rate hike, which may restrict the upward movement of oil prices. Any negative news on the US debt ceiling can also drag the oil in the coming week. Falling crude oil or steady prices are good for the Indian economy and domestic markets.
FII & DIIs flow
Foreign Institutional Investors (FIIs) continued their buying spree, while Domestic Institutional Investors (DIIs) also turned into net buyers in the Indian equity markets last week. FIIs bought shares worth Rs 3230.49 crore DII purchased Rs 3482.21 crore shares for the week. Institutional buying has encouraged domestic retail clients during the week.
We feel both FIIs and DIIs will continue their inflow in Indian equity markets in the near term. Traders should keep track of FIIs and DIIs actively closely in the next week to gauge the market direction.
Conclusion
Technically markets are in positive trends, the global cues are also positive now. The domestic markets are expected to remain positive in the coming week but traders should remain cautious and keep track of the above factors in the coming week. You can also follow our Daily Morning Report at 7.30 am to know the market direction.
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