Image Credit: The Financial Express
As trading begins on the Indian stock market on Wednesday, the indices are expected to open negatively with trends on SGX Nifty showing a 24 point loss. On Tuesday, Sensex had closed at 52,773.05 points while the Nifty rose by 57.40 points to reach 15,869.30 points. With its closing level quite close to the opening level, the Nifty formed a Doji candle on the charts.
In the global markets, Japan’s Nikkei 225 dropped by 0.27% while the Topix increase by 0.17%. In the US, Dow Jones closed negatively after falling 94.42 points. Meanwhile, S&P 500 and Nasdaq Composite dropped by 0.20% and 0.71% respectively.
Here are the important factors which will determine the direction the stock market indices take on Wednesday:
US Fed meeting:
The attention of investors around the world is fixed on the US Federal Reserve meeting on 15 and 16 June. The markets are looking for guidance from the federal reserve’s announcements on Wednesday at the end of the two-day meeting.
Exports surge by 70% in May:
India’s merchandise exports have gone up by around 69.7% in the month of May. According to data released by the Commerce and Industry Ministry, the value of exports rose to $32.27 billion in May 2021 as compared to $19.05 billion in May 2020. The increase is attributed to a lower base in 2020 due to the COVID-19 pandemic.
FII & DII activity:
On Tuesday, foreign institutional investors net purchased shares valued at Rs.633.69 crore. On the other hand, their domestic counterparts net sold shares valued at Rs.649.29 crore.
Coronavirus cases decrease by 85% in over a month:
According to statistics revealed by the Indian government, cases of coronavirus have dropped 85% from the peak reached on May 7. Meanwhile, the COVID-19 weekly positivity rate also declined by 78%.
Increased inflation may force RBI to revise policy:
Oxford Economics, in its assessment on Tuesday, said that the central bank might revise its growth focussed policy due to a huge spike in inflation in May 2021. However, it added that an interest rate hike still doesn’t seem likely.