G7 Summit to US GDP data: Top 5 factors that may impact stock market next week

Indian stock market closed higher for the day on Friday and for the week aided by positive global cues but on lower than normal volumes suggesting lower participation by FPIs who have been sellers relentlessly in Indian markets. According to stock market experts, the US GDP contracted in Q1 and is expected to slow to almost zero by the second half of the year, indicating signs of economic distress. Recent data releases from Japan, Britain, Eurozone and the United States showed that factory activities remained muted in June across all the regions.

Giving his views on the market wrap last week, Rahul Shah, Co-Head of Research at Equitymaster said, "The pullback in the Indian stock market this week seems more like a relief rally than a full-fledged recovery. Global macros continue to remain challenging and may continue to act as a drag on Indian stocks as well. However, with valuations coming off from their highs, the risk reward from a 2 to 3-year perspective is definitely looking much better for Indian stocks. This is a good time to start accumulating fundamentally strong stocks as long as one is not paying too much premium for quality and stability."

Here we list out top 5 triggers that may dictate stock market next week:

1] G7 Summit 2022: "G7 Summit 2022 is scheduled from 26th to 28th June 2022 and any further escalation of geopolitical tension in regard to Russia-Ukraine war and China-Vietnam may lead to sharp correction in global equity markets. So, stock market investors are advised to keep an eye on the G7 Summit next week," said Anuj Gupta, Vice President — Research at IIFL Securities.

2] Dollar index: "Next week, a lot of triggers will dictate the trend for gold prices. The first major variable will be the movement of the dollar index as it would decided FIIs' activity in the Indian markets. Dollar index rebounded strongly after some ease last week and any further rise in dollar index may lead to sharp selling by FIIs," said Anuj Gupta of IIFL Securities.

3] OPEC+ meeting: "Any unexpected significant oil output boost will help ease oil prices and inflation. Nonetheless, OPEC and its members are adhering to their initial plan to add 432,000 barrels per day to the market, and no surprise announcements have been made by OPEC despite oil prices surfing at triple digits," said Sreeram Ramdas, Vice President at Green Portfolio — SEBI Registered portfolio management service provider.

4] US GDP Q1 data: This is an important trigger that market observers and investors need to remain vigilant next week. If the numbers are disappointing, then speculations for slowdown in the US economy will get further strength leading to sharp selling in global markets including the Dalal Street.

5] UK retail sales: "With UK’s inflation at a 40-year high reaching 9.1%, consumer spending and budgeting have taken a toll. Considering 25% of the FTSE 100 – stock market index of the UK – consists of consumer staples and consumer discretionary companies, this retail print will be critical," said Sreeram Ramdas of Green Portfolio.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.