Global trends to guide markets this week


From Omicron to Macroeconomic data, to PMI data announcement and global trends, let’s look at the factors that would influence the trading segment.

These factors are important in the first week of the new year of 2022 for the new equity market.

2021 was a historical year for Indian stock indices as it crossed many milestones and the 30-share Sensex made an annual gain of 10,502.49 points or 21.99% in 2021.

Experts and traders are closely eyeing crucial high-frequency data like monthly auto sales, India Manufacturing PMI and India Services PMI.

These are important as this week is the beginning of a new month. They are also looking at pandemic and the global markets.

Even though the Indian market has recovered for the past two weeks, the Indian economy is not out of danger. As a result, the participants should be cautious and take a hedging approach.

Almost every sector is participating, but banking, pharma, IT and FMCG seem to perform better than everyone especially in the coming week. With the Omicron variant threat on the horizon, markets will start in a cautious sideways movement.

But they are optimistic in total, as they expect the Nifty to deliver around 12-15% returns in 2022. This optimism is supported by the good economic recovery, strong earnings growth and positive macroeconomic data.

The PMI data for the manufacturing and services sector is about to be released this week. This will influence the trading sentiments. The domestic market will maintain its growth supported by a healthy long-term domestic growth forecast.

Another major financial event to be tracked is the RBI decision on interest rate hikes. Another sector under focus is the automobile industry with its monthly sales data announcements.

For equity investors, the year 2021 was a highly rewarding one. After the pandemic triggered the crash of March 2020, the 30-share benchmark Sensex soared past 50,000 and 62,000 levels last year.

Even though affected by many variants, India outperformed its global peers.

The reason for the performance is because of the strong momentum created by rising consumerism, vaccine coverage, economic recovery and retail participation. The record number of IPOs also boosted investor confidence adding to the growth.

Other movements that will influence the market are, foreign institutional investors, the rupee and Brent crude.

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