Key policy action by major central banks will take center stage in global financial markets this week, following the RBI’s decision to raise the repo rate – the interest rate at which it lends money to banks trade – by 50 basis points as expected last week. All eyes will be on a monthly reading of consumer inflation in India due on Monday, to gauge the course of rate hikes in the months ahead.

Data from the United States last week showed consumer prices hit a new 40-year high of 8.6% in the world’s largest economy in May, bolstering the view that the Fed will continue to raise rates aggressively.

Central banks around the world face the Herculean task of reining in persistent inflation without disrupting the pace of economic growth amid a resurgence in COVID infections.

Crude oil prices will also be closely monitored.

The week that was

India’s equity benchmarks suffered their biggest weekly decline in a month on Friday, led by weakness in financials, IT and consumer durables stocks.

A total of 34 stocks suffered weekly losses.

Investors remained on the sidelines amid concerns over aggressive rate hikes, after the RBI – in its first bi-monthly review since its surprise decision on May 4 to raise the repo rate by 40 basis points – raised its projections for inflation for the year ending March 2023.

However, any increase in the cash reserve ratio – the amount of cash commercial banks must keep with the RBI – has helped investor sentiment somewhat.

“The RBI got realistic in withdrawing its ‘dovish’ stance and raising its inflation forecast… However, the domestic market‘s focus shifted to the global macro economy as investors anticipated hawkish Fed policy this week. next,” said Vinod Nair, Head of Research at Geojit Financial Services.

Technical view

“Despite last week’s trading patterns suggesting further downside, the overall bearish momentum has moderated as the Nifty trades above the falling resistance line. doesn’t fall below 15,900, there’s a good chance it could test 16,800,” said Yesha Shah, head of equity research at Samco Securities.

She suggests traders keep a neutral view this week and avoid aggressive trading on either side.

Here are the main factors and events likely to influence Dalal Street during the week starting June 13:

GLOBAL INDICES

DOMESTIC INDICES

Macroeconomic data

Official data on consumer inflation in India is due on Monday, June 13. Wholesale inflation data will be released the following day.

Industry body SIAM is due to release a monthly report on sales, production and exports on Monday.

IFI activity

Institutional fund flows will continue to be on investors’ radar, amid continued sales of Indian equities by overseas institutional investors.

Securities transaction

First post: June 12, 2022, 1:21 p.m. STI