Upcoming week of Dalal Street Top 10 factors to watch next week include India, US inflation, quarterly earnings


The market snapped a two-week losing streak and closed the week ended October 6 with modest gains after showing a smart recovery from weekly lows, which could be partly due to oversold conditions. The recovery may continue in the coming week as well, but volatility cannot be ruled out with more stock specific action given the start of September quarter earnings season, experts said, adding that participants will also be looking at US and India’s September inflation. The figures will also be closely monitored. With FOMC minutes.

The equity market rally was majorly supported by falling oil prices, healthy domestic PMI data and status quo in the repo rate of the Monetary Policy Committee, but the RBI still views inflation as a major risk and has resorted to OMO (Open Market Operations). ) voices were loud with the announcement. The selling to manage liquidity led 10-year bond yields to rise sharply on Friday. Significant FII outflows due to higher US bond yields and US dollar index limited the gains.

During the week, BSE Sensex rose 167 points to 65,996 and Nifty 50 rose 15 points to 19,654, while Nifty Midcap 100 index fell 0.6 per cent and Smallcap 100 index rose 0.7 per cent. Auto, bank, energy, pharma, oil and gas stocks remained under pressure, while technology and realty stocks remained bullish.

“Rising US bond yields and a strong dollar index have discouraged foreign investors, leading to weakness in the market. Additionally, strong job data from the US this week helped push US bonds ahead of a possible rate hike by the Fed. Vinod Nair, head of research at Geojit Financial Services, said, “Yields are indicating an imminent rise in interest rates.”

He further said that RBI’s accommodative stance, especially in managing liquidity to counter inflation risks, has also impacted the market, however, the market got some relief from strong domestic PMI data and improving crude oil prices. Got support.

He believes the focus will now shift to quarterly results from the IT and banking sectors starting next week.

Here are 10 key factors to consider:

corporate quarterly earnings

The corporate earnings season for the July-September period of fiscal 2024 will be kicked off by IT majors next week, with TCS releasing the scorecard on October 11.

HCL Technologies, Infosys and HDFC AMC will announce quarterly earnings on October 12, while HDFC Life Insurance Company on October 13, Avenue Supermarts on October 14 and HDFC Bank on October 15.

Even recently listed companies like Sammy Hotels, Signature Global (India) and Zaggle Prepaid Ocean Services will announce their numbers next week on October 11.

Most brokerage firms expect Nifty 50 earnings growth for the July-September period to be 21-23 per cent year-on-year, driven mainly by banks, auto and oil marketing companies.

Also read: Highlights of GST Council: Human consumption out of GST, tax cut on jaggery, millet

cpi inflation

Apart from earnings, market participants will keep an eye on September CPI inflation to be released on October 12. CPI inflation, a key data point for the MPC, is expected to decline further due to falling vegetable prices and LPG price cut.

“We estimate CPI inflation slowed significantly to 5.3 per cent in September from 6.8 per cent in August, returning within the RBI’s target range of 2-6 per cent after two months. Food and fuel inflation The reduction could potentially lead to a softening of headline rates,” said Rahul Bajoria, MD and head of EM Asia (ex-China) Economics at Barclays. Core inflation will likely remain flat, which would allow the RBI to keep policy rates unchanged. Will allow.

Besides, industrial production data for August will also be announced on October 12, while WPI inflation and trade balance data for the month of September, and foreign exchange reserves for the week ending October 6 will be released on October 13.

FOMC Minutes and US Inflation

Globally, investors will take cues from the FOMC minutes for the September policy meeting to be released on October 11 and US inflation due to be released on October 12, while also keeping an eye on speeches from several Fed officials over the next week.

Analysts expect inflation, which is a key data point for the Federal Reserve to decide on the fed funds rate, to ease slightly in September from 3.7 percent in August, but it will still be well above the central bank’s 2 percent target. Is above. With rates held unchanged at its September policy meeting, the Fed indicated that interest rates could remain high through 2024, with another rate hike expected by the end of 2023, while Fed officials expect inflation of 2.6 percent by the end of 2024. Yes, it can also be deeply denied. Recession. Core inflation declined to 4.3 percent in August from 4.7 percent in the previous month.

China will also release its inflation data for September. The inflation rate in August was 0.1 percent.

global economic data points

Here are the key global economic data points to note:

FII flows

In the past brief week, foreign institutional investors have sold shares worth a net Rs 8,400 crore in the cash segment as the US 10-year Treasury yield hit a 16-year high and the US dollar index hit its highest since November last year. level has been reached. Experts say domestic institutional investors managed to offset FII outflows, but unless US bond yields and dollar index decline, outflows may continue.

DIIs bought shares worth a net Rs 4,400 crore in the first week of October, while the US 10-year Treasury yield closed the week at 4.8 per cent and the US dollar index at 106.10.

Also read: Harsh tone intact, rate cut unlikely in near future

oil prices

The sharp fall in oil prices from more than 10-month highs was positive for Indian equity markets as India is a net oil importer. Rising US bond yields and a stronger dollar as well as global demand concerns weighed on oil prices during the week. International benchmark Brent crude futures fell 8.26 percent during the week, the biggest weekly loss since March, and closed at $84.58 a barrel, falling for the third consecutive week from a high of $95.96 a barrel.

Saumil Gandhi, Senior Analyst – Commodity at HDFC Securities estimates that crude oil prices should consolidate lower with a negative bias after a sharp selloff in prices.

technical scene

Nifty50 made a good comeback after defending 19,300 points and broke its two-week losing streak. The index has formed a small-sized bullish candlestick pattern with a long lower shadow and short upper shadow on the weekly chart, which resembles a hammer type candlestick pattern on a downtrend, which is a bullish reversal pattern. Experts said this has increased expectations of a trip north in the coming sessions, which if true in the following trade then 19,800-20,000 cannot be ruled out with significant support in the 19,600-19,300 zone.

Also read: TCS will consider share buyback with second quarter results, board meeting to be held on October 11

Nifty has failed to cross the short term moving average (20 exponential moving average placed at 19,670) in recent days and is again hovering around the same zone. A decisive close above 19,670 could help the index surge towards 19,800-20,000 zone, said Ajit Mishra, SVP (Technical Research), Religare Broking.

On the downside, he feels the 19,200-19,450 area will continue to act as support in case of a reversal.

F&O Cues, India VIX

Options data also indicated that Nifty may face strong resistance at 19,900-20,000 levels with important support at 19,600-19,500 levels.

According to weekly options data, maximum call open interest (OI) was at 20,000 strike, followed by 20,500 and 19,900 strikes, meaningful call writing was at 20,500 strike, then 20,000 and 19,900 strikes.

On the Put side, maximum open interest was seen at 19,500 strike, followed by 19,600 and 19,000 strikes, with writing seen at 19,600 strike, then 19,000 and 19,500 strikes.

Meanwhile, volatility has largely reduced over the past week, giving bulls more comfort. India VIX, which measures the expected volatility of the Nifty 50 over the next thirty days, fell 10 per cent to 10.3 from 11.45, the lowest level since July.

IPO

Activity in the primary market seems to be slowing down as only one IPO is scheduled to open for subscription next week. Gujarat-based Arvind & Co. shipping agency will open its Rs 14.74 crore public offering in the SME segment with an offer price of Rs 45 per share during October 12-16, while Committed Cargo Care will close its IPO on October 10.

On the listing front, in the mainboard segment, Delhi-based wire manufacturing company Plaza Wires will make its stock market debut on October 13, while lubricants manufacturing company Arabian Petroleum and event management firm E Factor Experience will list their shares on NSE Emerge. According to the IPO schedule, on October 9.

Among others, City Crops Agro will debut on BSE SME and Goyal Salt & Contour Space on October 10 on NSE Emerge, while OneClick Logistics India and Canary Automation are set to list shares on NSE Emerge on October 11.

Additionally, Viva Tradecom will debut on BSE SME, and Vishnusurya Projects & Infra, Sharp Chucks & Machines, and Plada Infotech Services will debut on NSE Emerge on October 12, while Karnika Industries will debut on NSE Emerge on October 12. NSE Emerge, effective October 13.

As per the IPO schedule, Sunita Tools is scheduled to list shares on BSE SME on October 9, but the exchange has not issued any circular yet.

corporate action

Here are the key corporate actions taking place next week:

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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