Sensex, Nifty this week: From F&O expiry to US FOMC minutes, factors that may drive Dalal Street

Last week, local equity markets displayed sluggish performance amid concerns around the US debt ceiling and below-expectation Q4 earning numbers from some major companies. The coming week is likely to see some volatility with the scheduled F&O series expiry on May 25 and traders balancing their positions going ahead for the next series.

Major Results this week: In the ongoing result season, traders will be eyeing the earnings of prominent private companies, including, Ashok Leyland, Biocon, Fortis Healthcare, JSW Energy, Shree Cement, Cummins India, Hindalco Industries, Vodafone Idea, Indian Energy Exchange, Page Industries, Zee Entertainment Enterprises, City Union Bank, Grasim Industries, Mahindra And Mahindra, Info Edge (India), JK Cement among others.

PSUs earnings: Bharat Petroleum Corporation, SJVN, Oil India, BEML, Bharat Heavy Electricals, Oil and Natural Gas Corporation, and NMDC will release their Q4 earnings.

On the economic front: Investors will be eyeing the Foreign Exchange Reserves data to be announced on May 26. India's forex reserves increased to $595.980 billion on May 5 from $588.780 billion in the previous week.

US market data: On the global front, investors would be eyeing a few economic data from the world’s largest economy, starting with Redbook, S&P Global Services PMI, S&P Global Composite PMI, S&P Global Manufacturing PMI on May 23 followed by FOMC Minutes on May 24, Initial Jobless Claims, Kansas Fed Composite on May 25, Durable Goods Orders, Personal Spending, Personal Income, Goods Trade Balance on May 26.

Market Macros: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, said the domestic equity markets corrected a bit last week. "The Nifty-50 index and BSE-30 index were down by nearly half a per cent. Global markets were mixed during the week amid concerns around the US debt ceiling. On the sectoral front, most indices declined during the week. However, BSE IT and BSE Realty posted weekly gains. India’s April macro factors have seen improvement with record GST collection, improved PMI numbers, trade deficit narrowing to near two-year lows, and sharp softening in headline and core inflation. FII’s has been net buyers of Indian equities in recent week."

Chouhan added that the weak global growth outlook continued to persist, even as inflation witnessed a moderation. "Stocks-specific action will continue as companies continue to declare their Q4FY23 results. Going ahead, markets will also keep a tab on monsoon movement. In the latest update, the IMD expects the onset of monsoon over Kerala is likely to be slightly delayed.”

Technical Outlook for Nifty: Deepak Jasani, Head of Retail Research at HDFC Securities, said that the global shares hit a one-month high on Friday as markets reflected increased hopes of a US debt ceiling deal that could avoid a potentially calamitous default and as investors shrugged off hawkish rhetoric from Fed speakers.

"Technically Nifty formed a bullish near hammer pattern on daily charts after a fall. On weekly charts, it fell 0.61%. Nifty needs to cross 18459 on the upside for the upward momentum to continue. 18055 on the downside needs to be protected if the intermediate bullish trend is to be maintained.”

"The last of the Q4 results are expected in the coming week. This could impact the individual stock prices, but the overall mood will be decided by the FPI flows and developments on the US debt default situation,” he said.