Inflation, IIP data, US Fed decision major factors to guide stock markets this week: Analysts

New Delhi: Announcement of macroeconomic data such as industrial production and inflation, the US Federal Reserve's interest rate decision along with trends in global equities would dictate movement in the stock market this week, analysts said.

Besides, foreign fund trading activity would also guide the trends in equities.

"All eyes are now on the US Fed policy outcome for cues, which is scheduled on June 14. In the following sessions, the European Central Bank (ECB) and Bank of Japan (BoJ) will also announce their policy decisions.

"On the macroeconomic front, participants will be tracking IIP data, CPI inflation and WPI inflation during the week. Apart from these factors, updates on the progress of monsoon will also remain on their radar," said Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.

From the macroeconomic front, industrial production data for April and the inflation rate for May would be announced on Monday. WPI (Wholesale Price Index) inflation data for May is scheduled to be announced on Wednesday.

Santosh Meena, Head of Research at Swastika Investmart Ltd, said, this week is expected to be crucial as several central banks would announce their decisions on interest rates.

"Of particular importance is the outcome of the US Federal Reserve's policy announcement on June 14. Additionally, policy decisions by the Bank of Japan and the European Central Bank will also hold significance.

"China's industrial production data, set to be announced on June 15, will be closely watched, as expectations of economic stimulus surround the release," Meena said.

On the domestic front, this week will have an announcement of India's Index of Industrial Production (IIP) and inflation numbers, he said.

Equity investors would also track the movement of the global oil benchmark Brent crude and the rupee.

"Institutional flows will also be a significant factor to consider, given their recent trend of buying over the past couple of weeks," Meena added.

Last week, the BSE benchmark climbed 78.52 points or 0.12 per cent, while the Nifty gained 29.3 points or 0.15 per cent.

The past week witnessed a period of consolidation in the markets, Meena said.

"India's CPI and WPI inflation, industrial production data, and manufacturing output will drive the markets this week. Some key global events such as US CPI data, initial jobless claims, Federal Open Market Committee (FOMC) meeting, and crude oil will also be in focus," said Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd.

Siddhartha Khemka, Head - of Retail Research at Motilal Oswal Financial Services Ltd, said, "The overall structure of the market remains positive, supported by lower volatility, healthy macros, and consistent Foreign Institutional Investors (FIIs) buying." "Now with major domestic events behind, markets will take cues from global events. This week, various global central banks interest rate decision would have a bearing on the equity market. The US Fed along with ECB and BoJ would be announcing their monetary policy outcome," Khemka said.