The market stayed heading upwards for the third straight week ended August 5, with the benchmark indices rising 1.4 per cent, despite volatility and rangebound movement on the back of fresh rate hike by the Reserve Bank and a simmering geopolitical tension between China and the US over Taiwan. The encouraging auto sales data for July and consistent FII buying interest and falling oil prices supported the market gains. The BSE Sensex rose 89 points to 58,388, while the Nifty50 climbed just 15 points to 17,397.
As we enter the holiday-truncated week, the experts were of the view that Global cues, Macro numbers, and the last batch of earnings will be key factors that will decide how the market behaves in the week, starting July 8. The market (NSE and BSE) will remain closed on Tuesday, August 9, on account of Muharram holiday. The NSE and BSE will also see no action on August 15, when India celebrates its 75th Independence Day and the market on August 31 due to Ganesh Chaturthi.
It was the third straight week of gain for the Indian equity markets thanks to continuous buying by FIIs, however, volatility has jumped at higher levels as the market is a little overbought in the short term, while indices are near important resistance levels, and some geopolitical concerns are also there, said Santosh Meena, Head of Research, Swastika Investmart Ltd.
“This week market will deal with the last batch of Q1 earnings, where the Market will react to SBI, HPCL and BPCL results on Monday, while Adani Ports, Bharti Airtel, Powergrid, Coal India, Eicher Motors, Hindalco, Grasim, Heromotocorp, LIC, ONGC, Bata India and Aurobindo pharma will be other prominent earnings next week. Global cues will be important as geopolitical concerns are rising, whereas both domestic and global macro numbers will play an important role,” said Meena.
Q1 Results
As we will be in the last week of June quarter earnings season, the number of companies to release quarterly corporate scorecard will be quite higher. Nearly 2,400 companies will report their numbers next week with important ones like Bharti Airtel, Adani Ports, Power Grid, Coal India, Eicher Motors, Hindalco Industries, Tata Consumer Products, Divis Laboratories, Grasim Industries, Hero MotoCorp, and ONGC.
Life Insurance Corporation of India, NALCO, Astrazeneca Pharma India, City Union Bank, Delhivery, Vedant Fashions, Samvardhana Motherson International, Sun Pharma Advanced Research Company, Torrent Power, Whirlpool of India, ABB India, Bectors Food Specialities, IDFC, Indraprastha Gas, MRF, MTAR Technologies, Nuvoco Vistas Corporation, Prestige Estates Projects, Sobha, Tata Chemicals, Trident, and Tata Teleservices (Maharashtra) will also be in focus ahead of June quarter earnings in coming week.
Dollar Index
“Dollar index has rebounded from its 105 support levels that is going to put pressure on the global equity markets. Fresh buying in the US dollar may erase the pressure created by the European Central Bank, Bank of England and other central banks on the US currency,” said Anuj Gupta, Vice President — Research at IIFL Securities.
Inflation and Industrial Output
The CPI inflation for July and industrial output for June will be released on Friday. The key data to watch out for would be CPI inflation that has been declining on a month-on-month basis to 7 percent in June, after hitting an eight-year high of 7.8 percent in April, but the RBI in its policy meeting retained its FY23 inflation forecast at 6.7 percent, assuming oil at $105 a barrel and normal monsoon in 2022, and expect it be below its 6 percent threshold in Q4FY23 and Q1FY24.
FII Data
It was a strong start to the month of August, though we have more than 1 percent gains on the benchmark indices, as foreign institutional investors were net buyers on every day during the week gone by, the first time in a week after several months. This gives a confidence to the market participants and hence it held on to the gains it recovered in last one-and-half-month despite volatility, though DIIs have utilised the opportunity to take some profit off the table.
Nifty Technical View
The Nifty50 has made several attempts to reclaim the crucial resistance point 17,500 amid the fight between bulls and bears but failed, and finally ended the week with bullish candlestick pattern on the weekly charts, while on the daily scale, there was Doji kind of pattern formation, indicating the indecisiveness about future trend among market participants. But the good thing was that bulls strongly defended its bullish gap zone (17,158-17,243) created on August 1 and also took support at 17,150-17,200, the low of August 1, though bears tried to break the same on August 4.
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