Key Market Triggers this Week: Q4 Results, Macroeconomic Data, Israel-Iran Conflict, and Global Cues

Last week, domestic equity benchmarks reached fresh lifetime high levels but settled flat due to dashed hopes of a June rate cut. This was prompted by higher-than-expected inflation in the US, coupled with positive US employment and manufacturing data. Geopolitical tensions in the Middle East and rising crude oil prices impacted overall market sentiment. Gold prices rose amidst uncertainties, leading to late-week consolidation in emerging markets. European markets, however, saw strong performance buoyed by potential rate cut indications from the ECB.

Within the domestic market, foreign investors are cautious due to subdued Q4 results expectations and high valuations of mid- and small-cap stocks. The IT sector continues to consolidate with lackluster Q4 earnings, while the auto and realty sectors show resilience with expectations of strong earnings momentum. Large-cap stocks are considered a safer bet amid heightened volatility and stable earnings outlook.

In the upcoming week, investors will focus on macroeconomic data, Q4 results, and ongoing IPOs and listings. Market analysts expect Nifty 50 to potentially dip further, but support is seen around the 22,350-mark, with relief for bulls only above 22,800. Stock selection and a hedged approach are recommended for traders amidst the volatile market conditions.

Key triggers for the stock market in the coming week include monitoring global cues, the Israel-Iran conflict, FII activity, and movements in crude oil prices. Analysts anticipate potential market volatility due to global concerns and ongoing geopolitical tensions. The Iran-Israel conflict poses a significant risk of triggering panic selling and volatility in global equity markets. Additionally, economic data from major economies and quarterly results will be closely watched by investors.

Lastly, corporate actions from companies such as Gujarat Toolroom, Stovec Industries, Schaeffler India, and others are expected in the upcoming week. Technical views suggest Nifty may face hurdles around the 22,700-22,800 zone and a further dip is likely before retesting support levels. Market participants are advised to monitor global indices, bond yields, and geopolitical events for market cues. Additionally, developments in FII activity and the ongoing conflict between Iran and Israel will influence market sentiment in the week ahead.