Market forecast for this week

4 Jul 2022 , 11:11 AM

Indian equity markets are likely to see more net selling by FPIs this week. There is a very strong likelihood that rupee will breach the Rs 80/ dollar mark. This will cause more selling by FPIs. So markets are likely to remain under pressure this week too. Volatility may remain there in the market as it swings between short term value buying followed by quick profit-booking. Most market participants are now moving with a short term perspective as uncertainty hovers around everywhere.

US Federal Reserve Chairman Jerome Powell accepted on Friday that the risk of a recession, because of central banks increasing interest rates, is now very high. The trend in oil prices will also affect Indian equity markets this week. Some analysts are predicting that economic recession by the end of this year will be so severe that by January next year, central banks will have to reverse course and start cutting down interest rates, instead of raising it. If the economic recession at the ground level is much more than expected then oil prices willl go down. 

Auto sales data of some companies, such as Bajaj Auto, that sell two wheelers, indicate to the economic slowdown that is there in the rural and urban markets both. Stocks of both Reliance and ONGC should be watched out this week. Their stock prices went down sharply on Friday after the Government increased export duties on refined petroleum products and domestically produced crude oil. These stocks are likely to see considerable swing this week.