The fallout of the Greece debt crisis, progress of monsoon, further reforms and derivatives expiry will determine the Indian equities trajectory in the coming week, analysts said.
"Greece debt talks are very important. Not only the Indian, but the US, European and Asian markets will be closely monitoring the event. Any negative fallout will spook investors worldwide and lead to a global sell-off," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
"Already the foreign investors have been on a selling spree in the past couple of weeks. This coming period will add a lot of anxiety," Nevgi said.
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The data with the National Securities Depository Limited (NSDL), showed that the FPIs (Foreign Portfolio Investors) off-loaded stocks worth Rs.3,232.55 crore or $504.74 million.
In May, FPIs had sold stocks worth nearly $3 billion. They had picked-up scrip worth $2.4 billion in April.
The Greek debt payment to the IMF (International Monetary Fund) is scheduled for June 30. On June 4, Greece had deferred a payment of 300 million euros that was due to be paid to the IMF.
Nevgi elaborated that the relief that came from the dovish stand taken by the US Fed by deferring an interest rate hike might be off-set by the Greece debt crisis.
According to Dipen Shah, head of private client group research with Kotak Securities, another important trigger for the markets will be the monthly futures and options (F&O) expiry that is slated for Thursday.
"Previously, we have seen when the markets are volatile, the funds that are taken out after the expiry are not immediately invested back. So we have to wait and watch. It will all depend on the market condition and cues that the government gives," Shah cited.
"The government's reform agenda and its investment plans in infrastructure and further easing of regulations will be key triggers for the markets," Shah said adding that some important announcements to look out for will be on minimum alternate tax (MAT) and goods and services tax (GST).
But rainy days will only bring back the confidence into the markets, pointed out Anand James, co-technical head for research with Geojit BNP Paribas.
"The next 10 days are important as they will give out a clear picture on the monsoon progress. The rains have progressed well for the initial 15 days , further good news will dilute the fears of a drought and raise hopes of rate cut," James said.
"The increase in minimum support price (MSP) for rice and pulses has been noteworthy. This, coupled with a healthy monsoon, should lessen triggers from an inflation based downtrend and give room to the apex bank to cut rates," James told IANS.
The government has increased the MSP for rice by Rs.50 and Rs.275 for pulses. Good progress of the monsoon will support the latest data on the consumer price index (CPI) which came in at 5.1 percent for May.
However, analysts cautioned against the possibility of heightened levels of volatility, as Thursday and June 30 approach.
"Global factors like China, Greece and domestic ones like the remaining part of the results season, rupee fluctuation and monsoon will play a major part in the upcoming weekly trade," Gaurav Jain, director of Hem Securities, told IANS.
"The resolve of the domestic investors will also be tested. With foreign funds out-flows continuing, the stocks have become more attractive to invest in," Jain added.
The correction in the Indian equities has given a golden opportunity to the domestic investors to pick up stocks. The domestic institutional investors (DIIs) bought stocks worth Rs.4,557.94 crore during the week under review.
(Rohit Vaid can be contacted at rohit.v@ians.in)
