Stock Market Prediction Next Week (18-22 Sept 2023)
Stock Market Prediction Next Week (18-22 Sept 2023): Indian stock markets ended on a strong note last Friday and gained for the third consecutive week. Sensex and Nifty closed at a record-high level on Friday. The positive momentum was fueled by a favorable inflation reading and a notable surge in IIP growth. However, the upside was limited due to rising crude oil prices and continued selling pressure exerted by the FIIs.
In the coming week, global cues will drive the domestic market sentiments. Other than macroeconomic data, Fed, BOE, and BoJ interest rate decisions, China’s Loan Prime Rate will keep traders busy in the coming week.
On the domestic front, there is no economic data lined up next week, however, traders will be closely watching the special parliamentary sessions that are going to start from September 18-22 next week.
The Crude oil price and FII flow will also dictate trends in the bourses in the coming week. The other key factors likely to impact the stock market prediction are given below.
Stock Market Prediction Next Week (18-22 Sept 2023)
Nifty & Bank Nifty Next Week
The Nifty index continues to hit new record highs. On Friday, the Nifty index just crossed 20200 levels during the intraday session and settled just near that level. The Nifty index is looking for further gains in the coming sessions with near-term targets expected in the 20300-20350 zone.
The broader markets once again are regaining strength with significant participation visible from the mid-cap and small-cap counters supporting the index for further gains. On a weekly basis, Nifty could trade in a range of 19900- 20500 levels.
Bank Nifty is just a few points short of the all-time high zone of 46370 levels and is expected to breach the same in the coming sessions. Most of the banking stocks are looking positive and have much upside potential.
For the Bank Nifty index, 45300 would be the near-term support and a decisive breach above the 46400 zone shall trigger further momentum with the next higher target of 48000 levels anticipated. On a weekly basis, the Bank Nifty index could trade in a range of 45300- 47400 levels.
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Domestic Macroeconomic Data
On Friday, government data showed that India’s trade deficit widened to a 10-month high of $24.16 billion in August. It was down by 2.8 percent on a YoY basis and the expectation was $21 billion as per a Reuters economists poll. In the previous month trade deficit had narrowed to $20.67 billion.
Another report from RBI showed that the weekly India’s foreign exchange reserves declined by $4.992 billion to $593.904 billion for the week ending September 8. On Monday, the weak economic data released during the weekend may impact negatively on the market sentiments.
Global Stock Market Prediction Next Week
Last week, the global markets ended mixed, the economic data released in the US were mostly strong while the retail inflation reading was slightly higher. The sentiments were mostly positive, as investors hoped that the Fed would skip the interest rate hike in next week’s meeting. However, the rise in Treasury yields, crude prices, and sharp correction in chipmaker stocks dragged the US markets sharply on Friday.
The European Central Bank signaled that the interest rate hike likely peaked after raising the 25 bps rate on Thursday boosted the European markets. Asian market sentiments were upbeat due to strong economic data released in China last week.
In the coming week, Monetary Policy will remain in focus, as Federal Reserve policymakers will meet on Tuesday for the latest FOMC monetary policy meeting, and the interest rate decision expected on Wednesday. Bank of England and Bank of Japan’s interest rate decision is scheduled on Thursday and Friday respectively. Meanwhile, the People’s Bank of China will meet on Wednesday for a Loan Prime Rate (LPR) decision for 1 Year and 5 Years.
Other than the Central Bank’s meeting, we will also get macroeconomic data like Housing starts from the US, Inflation readings from the UK and Japan, Retail sales data from the UK, and Flash PMI data. The other key macroeconomic data that are likely to impact the global stock market prediction are given below.
Global Macroeconomic Data
| Important Global Macro Data Next Week | ||
| 18 September 2023 | NAHB Housing Market Index Sept | US |
| 19 September 2023 | Current Account July | EA |
| 19 September 2023 | Inflation rate Aug | EA |
| 19 September 2023 | Housing Starts Aug | US |
| 20 September 2023 | Balance of Trade Exp/Imp Aug | Japan |
| 20 September 2023 | Loan Prime Rate 1 year & 5 Year | China |
| 20 September 2023 | Inflation Rate Aug CPI/ PPI | GB |
| 20 September 2023 | Retail Price Index Aug | GB |
| 20 September 2023 | Federal Reserves Interest Rate Decision | US |
| 21 September 2023 | BoE Interest Rate Decision | GB |
| 21 September 2023 | Current Account Q2 | US |
| 21 September 2023 | Philadelphia Fed Manufacturing Index Sept | US |
| 21 September 2023 | Weekly Jobless Claims | US |
| 21 September 2023 | Consumer Confidence Flash Sept | EA |
| 21 September 2023 | Existing Home Sales Aug | US |
| 22 September 2023 | Inflation Rate Aug/ Core Inflation | Japan |
| 22 September 2023 | Jibum Bank Manufacturing PMI Flash Sept | Japan |
| 22 September 2023 | Bank of Japan Interest Rate Decision | Japan |
| 22 September 2023 | Retail Sales Aug | GB |
| 22 September 2023 | HCOB PMI Flash Sept | EA |
| 22 September 2023 | S&P Global/ CIPS PMI Falsh Sept | GB |
| 22 September 2023 | S&P Global PMI Flash | US |
Crude Oil Prices
The crude oil prices gained for the third straight week. Oil prices are at a 10-month high due to concern about tight supply, as Saudi Arabia and Russia extended the production cuts and on optimism of Chinese demand. Both the oil benchmarks WTI and Brent gained about 4% on a weekly basis.
The upbeat industrial output and retail sales data in China boosted the oil prices last week. As China is the largest importer of crude oil, the recovery of the Chinese economy is considered to increase oil demand for the rest of the year and hike the oil prices, as the supply side is already tight.
On Friday data showed that Chinses oil refinery processing rose by nearly 20% as compared to last year, which indicate a high demand for oil product in the coming days. Meanwhile, the expectation of a slowdown in US oil output also hiked the oil prices in recent days.
The rising crude oil prices have now become one of the main concerns for traders, as this can again spike inflation in the coming days. India is the third largest importer of crude oils in the world, higher crude oil prices for a longer period will impact the economy and influence negatively to the markets.
FII & DIIs flow
Foreign Institutional Investors (FIIs) were the net sellers in the Indian equity cash markets last week. They were net sellers in two out of five trading sessions and offloaded shares worth Rs 791.62 crore during the week. Domestic Institutional Investors (DIIs) were the net buyers last week. They bought shares worth Rs 3363.36 crore, which was much higher than the FIIs selling.
Foreign Institutional Investors (FII) were the net sellers in the first 15 days of September month, they offloaded shares worth about Rs 9580 crore. The continued selling pressure from FIIs is due to rising US bond yields and a strengthening dollar. As long as the US 10-year bond yields remain high above 4%, FII selling likely continue and impact the domestic markets.
Traders should keep a close eye on FIIs and DIIs data in the coming week, as FIIs return can further add fuel to the existing positive momentum.
Conclusion:
On Friday, Indian stock markets concluded at record high levels. Going ahead, the coming week will be holiday-shortened, as NSE/BSE will be closed on Tuesday, 19 September in observance of Ganesh Chaturthi. Despite the holiday, the overall outlook for the Indian stock market remains positive.
Meanwhile, the US markets experienced a sharp fall on Friday, as investor’s attention now turns to the Fed interest rate policy next week. In the absence of any domestic events, the direction of Indian markets next week will be heavily influenced by global cues. It is important to be aware that the global markets will remain volatile as there are some crucial events lined up next week.
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Nifty and Bank Nifty Prediction for Monday, Sept 18, 2023
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