D-Street week ahead: Global trends, FII trading activity in spotlight

Market sentiment this week  (1-5 July,2024) is expected to be shaped significantly by the trading activity of foreign and domestic institutional investors (FII and DII) and the fluctuations in crude oil prices.Besides,key domestic macroeconomic data announcements would play a crucial role in shaping investor confidence and market direction.The domestic share market indices recorded gains this week despite mixed signals from the global market, particularly regarding inflation concerns. Markets concluded a two-week consolidation phase by gaining over 2 percent this week, continuing the prevailing uptrend. 
Last week, the BSE benchmark jumped 1,822.83 points or 2.36 per cent, and the Nifty climbed 509.5 points or 2.16 per cent.The Sensex recorded the best monthly gain in June by climbing 7.14 per cent.
The Sensex breached the historic 79,000 mark on Thursday, and the Nifty hit the 24,000 level for the first time in intra-day trade.
On the global front, the US market has experienced some profit-booking from higher levels. Key economic data, such as the US job openings report, will be released on July 2, 2024, followed by the US ISM Services PMI data on July 3, 2024, according to information.
Additionally, the US Federal Reserve Chairperson Powell's speech is scheduled for July 2, 2024, and the US FOMC (Federal Open Market Committee) minutes will be released on July 3, 2024. The movement of dollar index and US bond yields will also be crucial factors to watch.
Analysts Perspective:
Analysts suggest that a combination of FII and DII activity and crude oil price trends will provide a comprehensive view of market sentiment. Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, reportedly quoted as saying,potential volatility in the stock market is anticipated this week. Elevated valuations remain a concern, with investors now focusing on monsoon progress and its impact on the rural economy. The upcoming Union Budget in July has become the next focal point, with high expectations for growth-oriented policies. Market sentiment will be gauged by closely monitoring foreign and domestic institutional investors' activity (FII and DII) and crude oil prices, he said.
The interplay between domestic macroeconomic data announcements, global trends, and foreign investor trading activity will be crucial in guiding market sentiments this week. Investors will need to stay vigilant and adapt to the evolving market landscape to make informed decisions.

(Writer is a Finance Research Analyst, based in Gandhinagar, Gujarat)