Sensex, Nifty this week: From India's bank loan growth to US Fed interest rate decision, factors that may drive Dalal Street

Last week, Indian equity markets ended in deep red amid higher US inflation numbers and weak domestic Industrial Production (IIP) data. The key equity benchmark Nifty50 slipped over 2% during the week. This week, India's bank deposit and loan growth data, services and manufacturing PMI, and forex reserves data are expected to move the market. Also, the Fed's interest rate decisions and FOMC economic projections for the US will keep the markets buzzing.

Economic Data: In the coming week, traders will be looking for the HSBC Composite PMI Flash, HSBC Manufacturing PMI Flash, and HSBC Services PMI Flash data to be released on March 21.

India's foreign exchange reserves data and deposit & bank loan growth data will be out on March 22. The country's foreign exchange reserves increased to $625.63 billion on March 1 from $619.07 billion in the previous week.

US Market Data: On the global front from the US, traders will first be eyeing NAHB Housing Market Index on March 18 followed by Building Permits Prel, Redbook on March 19, Fed Interest Rate Decision, FOMC Economic Projections on March 20, Fed Press Conference, Initial Jobless Claims, S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, S&P Global Services PMI Flash on March 21 and Baker Hughes Oil Rig Count on March 22.

Market outlook: Deepak Jasani, Head of Retail Research at HDFC Securities, says Asian markets mostly fell in line with Wall Street on Friday after a sharper-than-expected jump in US wholesale prices dealt a blow to hopes for interest rate cuts.

"European stocks were on track for their eighth consecutive week of gains — the longest winning streak since 2018 — lifted by a conviction that euro-area interest rates will start to fall in the coming months. Investors also braced for a Federal Reserve meeting next week that could provide clues on the timing of the central bank's interest-rate cuts," he added.

On domestic macros, Jasani said India's merchandise trade deficit widened to $18.71 billion in February from $17.49 billion in January and $16.57 billion in February 2023. While the trade deficit widened in February, exports rose by 11.9 % from the year-ago period to $41.40 billion and imports were up 12.2 % at $60.11 billion, he said. At $41.40 billion, India's merchandise exports in February were the highest in 11 months. 

The technical outlook for Nifty: "Nifty snapped a 4-week gaining streak on March 15. It fell 2.1% for the week and formed a bearish engulfing pattern on weekly charts. Nifty has been facing selling pressure on rises and we expect this to continue. Nifty could now take support at 21861 and later at 21750. On rises, 22203 and later 22405 could offer stiff resistance," Jasani said.

Bank Nifty: According to Rupak De, Senior Technical & Derivative Analyst at LKP Securities, the Bank Nifty index witnessed a volatile trading session, forming a doji candle that signals indecision in the market.

"Immediate resistance for the Bank Nifty index lies at 47000, coinciding with the 20-day moving average (20DMA). A decisive break above this level could propel the index higher towards the 47500 mark. On the flip side, the lower-end support is positioned at 46500-46300, where bulls are currently attempting to defend. However, a breach below this level may intensify selling pressure in the market," De said.