Stock market this week will be guided by a host of key macroeconomic data points including the industrial production numbers for April, global cues, trend in crude oil prices and progress of monsoon, say experts.
"Going ahead, the focus would be on the US Fed policy meeting where it is widely believed that it will hike interest rates," said Sanjeev Zarbade Vice President – Research, Kotak Securities.
"Also of interest would be, the ECB meeting in which it is being expected that the monetary body may signal a path towards end of the stimulus programme. Markets would also await IIP and CPI data to get a sense of the domestic macro trends," he added.
"Progressing monsoon and positive outlook on rural market is giving a boost to the economy, which is already showing signs of improvement. Additionally, cues from economic data like CPI, IIP and WPI will also be a determining factor in the market movement," said Vinod Nair, Head of Research, Geojit Financial Services.
Market experts said that the near term market trend will be dictated by domestic macro data like IIP, CPI and WPI, movement of crude oil prices and currency (INR vs USD) and progress of monsoon.
Meanwhile, foreign investors poured in more than Rs 2,200 crore in the Indian equity markets in the last six trading sessions on the back of easing of global crude oil prices and revival in corporate earnings.
This comes following a net outflow of over Rs 15,600 crore in equities during last two months. Prior to that, foreign portfolio investors (FPIs) had pumped in Rs 11,655 crore in March.
According to latest data available with the depositories, the net investment by FPIs in equities stood at Rs 2,241 crore during June 1-8.
Such overseas investors, however, pulled out Rs 405 crore from the debt markets during the period under review.
"Indian equities have seen some buying from FPI's in June 2018 on the back of easing of global oil prices from their recent highs," said Ajay Bodke CEO and Chief Portfolio Manager at PMS Prabhudas Lilladher.
The easing is premised on expectations that global crude output will increase by at least 1 million barrels per day post June 22 meeting between OPEC members (led by Saudi Arabia) and Russia has rekindled hopes that the sharp run-up in oil prices since the start of 2018 has run its course over the short term, he added.
Further, Bodke said that the just-concluded fourth quarterly results point to revival in corporate earnings (baring corporate focused public and private sector banks) with volume growth in double digits in many sectors such as FMCG, retail, autos among others.
A favourable monsoon and good kharif harvest is likely to strengthen these growth impulses in the second half of the ongoing fiscal, he added.
According to Equirus Capital Director of Capital Markets Munish Agarwal, Valuations in Indian markets, especially, in mid-caps and small-caps have come off over the last one month which is making a lot of FPIs consider increasing their allocations to Indian equities and use this. opportunity to increase exposure to select stocks.