Market forecast – What to expect this week?

22 May 2023 , 01:40 PM

Indian equity markets are likely to see a volatile week. Demonetization of Rs 2000 notes in the year leading to general elections has come as a bit of a shock. It may have some marginal adverse impact on the ongoing economic recovery too. 

On the global front, US Federal Reserve Chairman, Jerome Powell, has indicated that the central bank will not go for an interest rate hike in June. This is welcome news for Indian equity markets and markets around the world.

China’s economic data for April was a bit disappointing. Industrial production grew y-o-y by 5.6% in April. Retail expenditure grew y-o-y by 18.4%. These growth numbers are on a very low base of numbers of April last year. Parts of the country were put in Covid lockdowns in April of the previous year. A weaker economic recovery in China will push back the expected increase in the demand for oil and other commodities. 

Japan’s economy grew quarter-on-quarter by 0.4% in the March quarter. On y-o-y basis, the country’s GDP grew by 1.6%. The country’s economy has come out of recession in the March quarter. Economic recovery is being driven by increased tourism. 

UK’s economy grew quarter-on-quarter by 0.1% in the March quarter. This growth was mainly due to heightened construction activity. Meanwhile, central bank of Argentina has increased benchmark interest rate to 97%. The central bank is trying to control inflation that has risen above 100%.

On the technical front, Nifty 50 is likely to see support at 17,980 level. Resistance is seen at 18,500 level.  A BUY call is being given on the stock of AIA Engineering for this week. Target price is Rs 2,950. A BUY call is also being given on the stock of Persistent Systems for this week. Targe price is Rs 5100.