Stock Market Prediction Next Week (20-24 March 2023)
Stock Market Prediction Next Week (20-24 March 2023): Indian stock market indexes ended lower for the second consecutive week, following the sell-off in the banking stocks in the global markets. FIIs selling pressure in Indian equity markets also hit the domestic market sentiments. However, the downside of markets remained capped due to falling crude oil prices and ease in inflation data during the week.
In the coming week, global sentiments will dominate the local stock markets. As the selling pressure in banking stocks resumed on Friday in the US and Europe markets, we may see volatility in the markets on Monday. The market participants will closely monitor the outcome of the Federal Reserve interest rate decision on Wednesday.
Bank of England Interest rate decision, China’s loan prime rate will also impact the domestic market sentiments in the coming week. The other key factors that are likely to impact the stock market prediction as given below.
Stock Market Prediction Next Week (20- 24 March 2023)
Nifty & Bank Nifty weekly prediction
On Friday, the Nifty Index after opening on a positive note near the 17100 zone lost steam in the initial half of the trading session but recovered strongly in the second half and ended near the 17100 level with sentiment and bias slightly improved.
If the Nifty index moves above the important zone 17200- 17250, then we can see a further up move in the coming days. The support for the week in the Nifty index on the spot level is seen at 16800 while the resistance is seen at 17500.
The Bank Nifty index also indicated a decent recovery in the second half, after making a low near 38900 levels, it ended near the 39600 level just near the significant 200DMA level with most of the frontline banking stocks picking up momentum with positive bias indicated.
The Bank Nifty index has got near-term support near 38500 and further ahead a decisive move past the 40000 zone would improve the bias for a further up move in the coming days. Bank Nifty on the spot level would trade in a weekly range of 38500-40800 levels
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Global Stock Market Prediction Next Week
The trend in global markets will derive the domestic market in the coming week. The global sentiments turned negative on Friday after heavy sell-off resumed in the banking space, as relief over rescue in Credit Suisse and First Republic banks faded away.
The market sentiments will continue to remain negative and volatile ahead of the outcome of the Fed’s interest rate decision which is due on Wednesday.
China will fix the loan prime rate on Monday and it is expected to keep the LPR steady for a seventh consecutive month to continue to support the property markets. Investors will remain cautious ahead of the Bank of England interest rate decision next week.
Further aggressive monetary policy tightening by BoE could demotivate the traders in the current situation. The other key economic data that are likely to impact the stock market prediction in the coming week are given below.
Global macroeconomic data next week
| Important Global Macro Data Next Week | ||
| 20 March 2023 | Prime Loan rate 1 & 5 yrs | China |
| 20 March 2023 | Balance of Trade JAN | EA |
| 20 March 2023 | ECB President Lagarde’s speech | EA |
| 21 March 2023 | ZEW Economic Sentiments MAR | EA |
| 21 March 2023 | Existing Home Sales FEB | US |
| 22 March 2023 | Inflation Rate FEB | GB |
| 22 March 2023 | Retail Sales FEB | GB |
| 22 March 2023 | Core Inflation FEB | GB |
| 22 March 2023 | PPI Output FEB | GB |
| 22 March 2023 | Current Account JAN | EA |
| 22 March 2023 | CBI Industrial Trend Order Mar | GB |
| 22 March 2023 | Fed Interest Rate Decision | US |
| 23 March 2023 | Reuters Tankan Index | Japan |
| 23 March 2023 | BoE Interest rate decision | GB |
| 23 March 2023 | Current Account Q4 | US |
| 23 March 2023 | Initial Jobless Claim | US |
| 23 March 2023 | New Home Sales FEB | US |
| 23 March 2023 | Consumer Confidence Flash MAR | EA |
| 24 March 2023 | Inflation Rate FEB | Japan |
| 24 March 2023 | Core Inflation FEB | Japan |
| 24 March 2023 | GFK Consumer Confidence MAR | GB |
| 24 March 2023 | Jibun Bank PMI Flash MAR | Japan |
| 24 March 2023 | Retail Sales FEB | GB |
| 24 March 2023 | S&P Global PMI Flash MAR | EA |
| 24 March 2023 | S&P Global/CIPS PMI Fash MAR | GB |
| 24 March 2023 | S&P Global PMI Flash MAR | US |
Federal Reserve Interest Rate Decision
It was almost 10 days back when traders were thinking that Fed would go aggressive in hiking interest rates due to tight labor markets and higher inflation readings. The recent banking turmoil has changed the scenario, now markets were pricing in zero likelihood of a 50 bps hike compared with a 40% chance almost 10 days back, according to a private report.
According to a report, markets are now expecting around a 39% chance on the Fed would keep interest rates steady in its next week’s meeting. Whereas some market participants and economists are also expecting a pause or hold on interest rate hikes in the upcoming meeting.
The global markets would react positively if there is a hold in an interest rate hike, while sentiments will further dip if Fed hikes interest rate by 50 bps. The Fed’s meeting in the coming week will set the global market direction.
Banking Turmoil
The banking crisis especially in the US and Europe continues to intensify despite the rescue plan. It started with Silicon Valley Bank (SVB), the nervous bank customers were frantically pulling out their money from the bank before US Regulator intervened and took control.
The collapse of the SVB group panicked the markets and then the second US regional bank Signature bank has been shut down and dampened the market mood.
Last Wednesday, fresh turmoil in Credit Suisse shocked the markets after the news that the key Sudi investor declined to invest in the troubled Swiss lender. This prompted fears of a widespread liquidity problem that has become a broader problem in the banking system. Then the First Republic Bank has become the target of the ongoing banking crisis.
The First Republic Bank tanked 33% on Friday and logging its biggest weekly drop. The bank has suspended its dividend and borrowed heavily from the Fed’s discount window. The shares of Credit Suisse also declined 8% on Friday.
The market sentiments will remain negative until the recent banking crisis is resolved. Though the US government has taken extraordinary steps to stop the potential banking crisis, investors are now will closely watch Fed’s monetary policy outcome for more measures.
Crude Oil Prices
The crude oil prices posted their biggest weekly fall since December 2022. The fall in oil prices is due to the banking crisis and possible recession. Brent crude oil prices fell 12% during the week while WTI crude oil was down by 13% for the week that ended on 17 March.
However, analysts are expecting China’s demand recovery will add some support to oil prices, as March’s export to China was nearly 30 months high. While any news related to production cuts could also get some support in crude oil prices.
The falling crude oil prices are good for the domestic stock markets, as India is the second largest crude importer in the world.
FII & DIIs flow
Foreign Institutional Investors (FIIs) were again turned into the net sellers in the Indian equity markets last week. They offloaded shares worth Rs 7953.66 crore while Domestic Institutional Investors (DIIs) bought Rs 9233.05 crore in the cash segment during the week that ended on 17 March 2023.
Traders should closely monitor the FII and DII actively, as heaving selling from FIIs could dampen the market sentiments.
Conclusion:
The Indian stock markets closed strong near the day’s high on Friday. Further up move can only be anticipated if there is global support. The coming week will be highly volatile due to the ongoing banking crisis, Fed and Bank of England (BoE) interest rate decision.
Traders need to remain cautious and avoid carryforward positions without hedging till the outcome of the US Federal Reserve’s meeting on Wednesday. You can also follow our Daily Morning Report at 7.30 am to know the market direction.
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