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Inflation data, Fed interest rate decision, key factors to boost markets this week: analysts

Inflation data for May and the U.S. Fed’s interest rate decision are the crucial factors that will dictate stock market conditions this week, analysts said.

In addition, foreign fund trading activity, the movement of the rupee and crude oil prices would be the other key metrics for the markets, they added.

“All eyes will be on the U.S. FOMC (Federal Open Market Committee) decision scheduled for June 15, and the market fears aggressive rate hikes amid monster inflation. The Bank of Japan will also announce its credit policy on June 15. June 17.

“It will be crucial to see the behavior of FIIs amid the panic in global equity markets as they have been selling relentlessly over the past 8 months,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

On the home front, CPI inflation will be announced on June 13 and WPI on June 14, he added.

“Apart from that, the movement of the Rupee and Crude Oil will be other important factors,” Meena noted.

We expect volatility to remain elevated this week as well, given the slate of important data and events, said Ajit Mishra, VP – Research, Religare Broking Ltd.

“Participants will react first to U.S. inflation, hitting a new 40-year high, as well as IIP data, which arrived after market hours on Friday.

“Looking ahead, we have CPI and WPI inflation forecast for June 13 and 14 respectively. On the global front, the outcome of the US Fed meeting will be released on June 15,” Mishra added.

Markets are once again reeling from huge pressure across the globe following lingering inflation that could prompt apex banks to act quickly, analysts said.

Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services Ltd, said the market is stuck in a wider range over the past month which is likely to continue until some direction clear emerges on each side.

Last week, BSE’s 30-stock benchmark fell 1,465.79 points or 2.62%.

“Overall, the Fed’s interest rate decision, as well as crude price volatility, will keep the market anxious. At home, CPI and WPI inflation will be the main spotlight this week,” said Yesha Shah, head of equity research, Samco Securities.