Stock market outlook: The Indian stock market closed in red mark in the week ended on May 30. This was the second consecutive week when the market fell. During this time, there was a market fluctuations and trading within limited range. There was a weakness in the global market as well and no major positive trigger was seen. Due to this, the sentiments of investors weakened.
However, in the week starting from next Monday i.e. June 2, many positive triggers are seen for the market. RBI can cut interest rate in third consecutive MPC, inflation has softened, better monsoon estimates and GDP data of the fourth quarter (Q4FY25) was better than expected. Also, auto companies Monthly Sales Report has also come on Sunday.
Experts believe that the market can trade with rangebounds but positive tones, where a strategy of buying on the decline can be adopted.
According to Siddharth Khemka of Motilal Oswal Financial Services, “The sector dependent on interest rates, especially PSU bank, will remain in focus amidst expecting RBI rate deduction. Also, the monthly cells and volume data of companies in the auto sector can bring sector-specific moves.”
He says that the market’s positive momentum may remain intact in June. Because Q4 GDP data has come strong, RBI rate cut is expected and foreign investors are constantly investing money.
Let us know which 10 big factor will decide the condition and direction of the stock market next week.
RBI’s decision on interest rate
Next week, the market will be eyeing the RBI Monetary Policy Committee (MPC) interest rate on the decision, which will come on 6 June. Most economists are hoping that this year RBI will reduce the repo rate by 25 basis points to 5.75 per cent this year, as the inflation rate remains below the target of 4%.
However, the expert believes that the market has already reacted to a large extent regarding this cut. So now the focus will be on the rate cut track of RBI and any change in inflation and growth estimate for the whole year.
Domestic economic figures
Apart from RBI’s MPC, investors will also eye the final figures of manufacturing and services PMI coming on June 2 and June 4. According to initial estimates, manufacturing PMI has increased to 58.3 in May, which was 58.2 in April, and Services PMI has jumped from 58.7 to 61.2.
In addition, the fortnight bank loan and deposit growth figures ended on May 23 and the Forex reserves of the week ended on 30 May will be released on June 6 at the end of the week.
Statistics related to American jobs
The focus on the global front will be on the data related to America’s jobs- such as unemployment rate, non—–aired parols, jolts job openings and quits data. In addition, developments related to the US Bond Market and Trump Tariff Policy will also be important, as they would indicate whether the Federal Reserve will cut further rates. The US unemployment rate for May is estimated to be 4.2%, which is equal to the previous month.
Last week, the US trade court declared Trump’s global tariff policy illegal. However, the Trump administration immediately challenged the decision. Trade Advisor Peter Navaro of the White House has said that even if there is a defeat in the court, the Trump administration will try to implement tariffs in other ways. Meanwhile, the US 10-year-old Treasury Bond Yield came to an end for 4 weeks and fell 2.46% to 4.398%.
Kayanat Chanwala of Kotak Securities told Moneycontrol, “Tariffs put on sectors such as steel, aluminum and auto sectors will remain, but the future of the rest of the tariff rests on the court appeal.
Global economic figures
Investors worldwide will keep an eye on the final figures of manufacturing and services PMI of May, especially on data from major countries like America, China and Japan. Apart from this, the initial figures of May inflation from Europe, the retail sales of April and the third quarter of the first quarter (Q1-2025) will also be important in deciding the direction of the market.
At the same time, the interest rate decision of the European Central Bank (ECB) is coming on 5 June. Most economists hope that the bank can deduct interest rates by 25 basis points to bring it up to 2 percent, as inflation is under control, even though Trump’s trade policies have increased global uncertainty.
Crude oil prices
Last week, the Global Benchmark- Brent crude futures fell 3.09% to $ 62.78 per barrel in the international market last week. This brought relief to oil importing countries like India. The price of crude oil fell below all the major moving average by falling in the second week in a row. These are signs of further weakness.
Since April, prices have remained below $ 70 per barrel. The legal disputes between the White House and the court over tariffs in the US have also affected these prices. Investors are now waiting for the OPEC+ meeting, where there is speculation to increase production for the third consecutive time.
Kayanat Chanwala of Kotak Securities said, “OPEC+ has approved a major supply increase of 4.11 lakh barrels per day for July. This is possible to further decline in oil prices next week.”
Foreign investors’ trend
Investors will monitor the mood of Foreign Institutional Investors (FIIS) in the domestic market. Fiis has sold for the second consecutive week. However, this time sold shares worth only ₹ 418 crore, which is much less than ₹ 11,591 crore last week. Fiis was a pure buyer for the third consecutive month in the month of May, he bought a total shares of ₹ 11,773 crore.
Experts believe that the US dollar can maintain interest in Indian shares due to the softening of the dollar, the slow growth of the US and China, and the strong growth and possible rate cuts in India.
In contrast, domestic institutional investors (DIIs) made tremendous purchases of ₹ 33,145 crore last week. This gave the market a strong support. His total net purchases in May were ₹ 67,642 crore, the highest monthly figure since January.
IPO market condition
The IPO market is likely to remain lethargy this week. No new public issue will open on the main board. Only a new issue in the SME segment- Ganga Bath Fitings will open on June 4. The company is in plans to raise ₹ 32.65 crore. Apart from this, the issue of ₹ 33.75 crore of 3B Films will be closed on June 3.
Talking about the listing, the AEGIS VOPAK Terminals and Schloss Bangalore will be entry in the market on June 2. At the same time, the listing of Prostarm Info Systems will be on June 3 and the listing of Scoda Tubes on June 4.
Trading of shares of Blue Water Logistics, Nikita Papers, and Astonea Labs will start from June 3 in the SME segment. At the same time, the listing of NR Vandana Tex Industries and Neptune Petrochemicals will be held on June 4 and 3B Films on 6 June.
Technical view
Technically, the Nifty is still looking positive, as it is firmly made up over the midline of all major moving averages (10, 20 and 50 weeks EMA) and Bollinger bands. Moving averages are tilted upwards, showing a strong trend, even though the Nifty is trading rangebound near the upper line of the Bollinger bands. Bollinger bands are still in expansion mode and a 25,100 swing can become a strong resistance.
RSI (Relative Strength Index) is built on 59.03, which has a mild downward tilt but it still maintains positive crossover. At the same time, MACD is also built above the zero line with positive crossover. If the Nifty goes above 25,100, the next target can be between 25,200–25,500.
On the other hand, at the bottom is 24,650 an amidiet support, which was the last week’s low. If it breaks, the level of 24,500–24,400 will be an important support zone. On going below it, the bears can get more strength.
According to weekly option data, the Nifty can trade within a radius of 24,400 to 25,000 in the near future.
- Call side: The most open interest is on 25,500 strikes, followed by 25,000 and 24,800. The highest call writing is also on 25,500, then 24,800 and 25,700 strikes.
- Put side: The most open interest is seen on 24,000 strikes, followed by 24,800 and 24,400 strikes. The highest put writing is at 24,400, then at 24,000 and 23,900.
The index India Vix measuring fear in the stock market fell 6.95% to 16.08 last week, which provided relief to the bulls. If Vix rests below 15, the market may become stronger.
Corporate action
Some major corporate action (dividend, bonus, stock split etc.) are going to be done in the coming week. (See chart)
Also read: Stocks to Watch: These 13 stocks will be in focus on Monday, big movement can be seen
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