Sensex, Nifty this week: From Q2 results to US inflation, factors that may drive Dalal Street
This week investors will be eyeing key data releases such as Q2 earnings of major IT companies, India's trade balance, Consumer and Wholesale Inflation data, and Industrial Production (IIP).
- Oct 8, 2023,
- Updated Oct 8, 2023 11:33 AM IST
Last week, Indian equity markets ended in green territory following some positive macroeconomic data. This week, investors will be eyeing key data releases such as quarterly results of major IT companies, marking the start of a fresh earnings season (Q2 FY24), India's balance of trade, consumer and wholesale Inflation data, and Industrial Production (IIP), along with the core inflation rate in the US - these will keep the markets buzzing.
Economic Data: The coming week will be heavily loaded with macroeconomic data. Traders will be eyeing the Index of Industrial Production (IIP) data for August slated to be announced on October 12. On the same day, Consumer price index (CPI) data for September is scheduled to be announced. The Wholesale Price Index (WPI) based inflation data is scheduled to be released on October 13. Meanwhile, India's Foreign Exchange Reserves and Balance of Trade data are to be out on October 13.
Quarterly Results: With the start of the second quarter earnings season, market participants will be watching some important results to be released next week. Tata Consultancy Services (TCS), HCL Technologies, Infosys, Tata Metaliks, and Avenue Supermarts are major companies to announce their earning numbers.
US Market Data: On the global front, investors would be eyeing economic data from the world’s largest economy, the United States (US), starting with Redbook and Consumer Inflation Expectations on October 10 followed by the Producer Price Index, Federal Open Market Committee (FOMC) Minutes on October 11, Core Inflation Rate, Initial Jobless Claims on October 12, Imports- Exports data, Michigan Consumer Sentiment, Baker Hughes Oil Rig Count on October 13.
Trend in global markets: Vinod Nair, Head of Research at Geojit Financial Services, said, "The rising US bond yields and a stronger dollar index have deterred foreign investors, causing weakness in the market. Additionally, robust job data from the US this week has raised concerns about a potential rate hike by the Fed, with the surge in US bond yields indicating an impending increase in interest rates."
Nair said the hawkish stance by the RBI, particularly in its management of liquidity to counter inflationary risks, has further impacted the market, leading to an increase in India's 10-year bond yield. However, he said, the market found some support from strong domestic PMI data and corrections in crude oil prices, which have helped it overcome the weak trend observed in the previous three weeks.
The auto sector struggled this week due to mixed monthly data. “Investors will closely monitor the release of US non-farm payroll data, which could significantly influence the interest rate outlook. Additionally, attention will focus on quarterly results from the IT and banking sectors starting next week." Nair said.
Technical Outlook: Rupak De, Senior Technical analyst at LKP Securities, said the Nifty ended the week with a modest gain despite the selling in the banking sector. "Overall, sentiment is expected to stay positive as long as it maintains above the critical support level of 19,500, as put writers are likely to offer support at this level. “On the upside, resistance is positioned around 19,750-19,800. A strategy of buying on dips would be favorable as long as it holds above 19,500."
Bank Nifty: Kunal Shah, Senior Technical and derivative analyst at LKP Securities, said the Bank Nifty struggled to regain ground above the ascending trendline on the daily chart, indicating a bearish trend in the banking sector. Additionally, he said, the index has consistently remained below crucial moving averages, further confirming this weak trend. "Looking ahead, a significant breakthrough above 44,550 could potentially propel the index toward 45,000 and beyond. On the downside, support is located at 44,200," Shah said.
Last week, Indian equity markets ended in green territory following some positive macroeconomic data. This week, investors will be eyeing key data releases such as quarterly results of major IT companies, marking the start of a fresh earnings season (Q2 FY24), India's balance of trade, consumer and wholesale Inflation data, and Industrial Production (IIP), along with the core inflation rate in the US - these will keep the markets buzzing.
Economic Data: The coming week will be heavily loaded with macroeconomic data. Traders will be eyeing the Index of Industrial Production (IIP) data for August slated to be announced on October 12. On the same day, Consumer price index (CPI) data for September is scheduled to be announced. The Wholesale Price Index (WPI) based inflation data is scheduled to be released on October 13. Meanwhile, India's Foreign Exchange Reserves and Balance of Trade data are to be out on October 13.
Quarterly Results: With the start of the second quarter earnings season, market participants will be watching some important results to be released next week. Tata Consultancy Services (TCS), HCL Technologies, Infosys, Tata Metaliks, and Avenue Supermarts are major companies to announce their earning numbers.
US Market Data: On the global front, investors would be eyeing economic data from the world’s largest economy, the United States (US), starting with Redbook and Consumer Inflation Expectations on October 10 followed by the Producer Price Index, Federal Open Market Committee (FOMC) Minutes on October 11, Core Inflation Rate, Initial Jobless Claims on October 12, Imports- Exports data, Michigan Consumer Sentiment, Baker Hughes Oil Rig Count on October 13.
Trend in global markets: Vinod Nair, Head of Research at Geojit Financial Services, said, "The rising US bond yields and a stronger dollar index have deterred foreign investors, causing weakness in the market. Additionally, robust job data from the US this week has raised concerns about a potential rate hike by the Fed, with the surge in US bond yields indicating an impending increase in interest rates."
Nair said the hawkish stance by the RBI, particularly in its management of liquidity to counter inflationary risks, has further impacted the market, leading to an increase in India's 10-year bond yield. However, he said, the market found some support from strong domestic PMI data and corrections in crude oil prices, which have helped it overcome the weak trend observed in the previous three weeks.
The auto sector struggled this week due to mixed monthly data. “Investors will closely monitor the release of US non-farm payroll data, which could significantly influence the interest rate outlook. Additionally, attention will focus on quarterly results from the IT and banking sectors starting next week." Nair said.
Technical Outlook: Rupak De, Senior Technical analyst at LKP Securities, said the Nifty ended the week with a modest gain despite the selling in the banking sector. "Overall, sentiment is expected to stay positive as long as it maintains above the critical support level of 19,500, as put writers are likely to offer support at this level. “On the upside, resistance is positioned around 19,750-19,800. A strategy of buying on dips would be favorable as long as it holds above 19,500."
Bank Nifty: Kunal Shah, Senior Technical and derivative analyst at LKP Securities, said the Bank Nifty struggled to regain ground above the ascending trendline on the daily chart, indicating a bearish trend in the banking sector. Additionally, he said, the index has consistently remained below crucial moving averages, further confirming this weak trend. "Looking ahead, a significant breakthrough above 44,550 could potentially propel the index toward 45,000 and beyond. On the downside, support is located at 44,200," Shah said.