Market Rally Faces Resistance Amid Profit Booking and Economic Data Awaited

Market Rally Faces Resistance Amid Profit Booking and Economic Data Awaited

Dil Bar Irshad | May 28, 2024 | 10:21 AM IST | Breaking News | Follow on Google News

Market Rally Faces Resistance Amid Profit Booking and Economic Data Awaited

Market Rally Faces Resistance Amid Profit Booking and Economic Data Awaited

After a stellar rally over the past few weeks, markets faced some resistance in recent sessions. On Tuesday, indices Sensex and Nifty opened marginally higher with a downside bias. At the time of this report, both indices were largely steady.

Further market movements are expected to hinge on upcoming macroeconomic data, including Q4 India GDP and US inflation figures due later this week.

On Monday, the benchmark indices ended marginally lower, partly due to investors booking profits at higher levels to mitigate potential risks ahead of the Lok Sabha election results. Vinod Nair, Head of Research at Geojit Financial Services, noted that investors started booking profits to avoid knee-jerk reactions in the market before the election outcome.

“Better earnings growth, the expectation of a revival in private capex, and a moderation in FIIs selling intensity are key positive triggers in the market,” Nair said. He also highlighted that the release of India’s Q4 GDP and US inflation figures this week would influence market direction in the near term.

India’s GDP grew at a robust 8.4 percent during the October-December quarter of FY 2023-24, continuing as the fastest-growing major economy. The country’s economy grew by 7.2 percent in 2022-23 and 8.7 percent in 2021-22.

Indian stock indices have reached fresh lifetime highs, driven by strong global market cues, expectations of Prime Minister Narendra Modi’s return to office, and solid macroeconomic fundamentals. With six phases of elections concluded, investors widely anticipate a comfortable victory for Modi’s government, sparking fresh stock buying.

Over the past two weeks, Sensex has jumped over 3,600 points cumulatively. Despite net selling by foreign investors, domestic institutional investors have remained net buyers, offsetting the outflows.

As the election results approach, market nervousness is evident. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, “A high possibility exists for the market to get a clue of the election results earlier than June 4th, potentially triggering a significant market move.”

Ajit Mishra, SVP of Research at Religare Broking, advised participants to focus on careful stock selection and effective trade management, anticipating further consolidation in the index ahead.

Note: This Content is produced from AI help, and original sources belonngs to Mint

Dil Bar Irshad

Dil Bar Irshad is a seasoned journalist, hails from Jammu Kashmir's Doda, covers political, social, business stories, index stories.