Market forecast – What to expect this week?

8 May 2023 , 01:26 PM

Indian equity markets may see a volatile week. Buying will be followed by profit booking, and vice-versa. Corporate results that will come during the week will also have an impact on the course of market movement. 

US banking crisis seems to be worsening. After the shutdown of First Republic Bank, another bank PacWest Bancorp, seems to be at risk of failure. After the European Central Bank, Reserve Bank of Australia has also increased interest rate by 25 basis points or 0.25%. In April, the Australian central bank had put interest rate hike on hold. This had indicated that the current interest rate hike cycle was being ended by the central bank. But this increase in May indicates that the central bank has seen further increase in inflation. And it is still clinging to the belief that it can control the rising inflation by increasing interest rate further. 

Meanwhile increase in interest rates keeps on hurting economic growth without having any significant impact on bringing down inflation rate. Euro zone’s economy in March quarter grew y-o-y by 1.3%. This is the slowest pace of GDP growth rate in the Euro zone in the past 4 quarters. Inflation in April in the Euro zone increased to 7%. 

On the technical front, support is seen for Nifty 50, for this week, at 17,850. Resistance is seen at 18,300. Banking stocks are likely to remain bullish this week. Auto stocks may see some selling pressure.