Sensex, Nifty this week: From India's foreign trade to Q4 results, factors that may drive Dalal Street

India’s foreign trade data, bank loan growth, US industrial production, and the quarterly results of some of the country's largest public sector units (PSUs) are likely to drive the stock market this week. Market participants will be looking forward to exports and imports data, and Wholesale Price Index (WPI) data which is scheduled to be released on Monday (May 15). India's merchandise trade deficit widened to $19.70 billion in March from $18.51 billion in the same month last year. Meanwhile, India’s annual wholesale price inflation rate declined for the tenth consecutive month to 1.34 per cent in March, the lowest since October 2020, compared to 3.85 per cent in the prior period and market forecasts of 1.87 per cent. India's foreign exchange reserves and deposit growth data are to be announced on May 19.

Major results this week: In the ongoing result season, traders will be eyeing the earnings of prominent companies, including Coromandel International, Pfizer, PVR INOX, Bharti Airtel, Granules India, Jindal Steel and Power, JK Paper, Max Healthcare Institute, Metropolis Healthcare, Oberoi Realty, Deepak Fertilisers, Jindal Saw, JK Tyre & Industries, Jindal Stainless, Jubilant FoodWorks, Zydus Wellness, Bata India, Interglobe Aviation, ITC, Trident, Glenmark Pharma, Godrej Industries, JSW Steel, and Zomato. Besides these, some PSUs will also announce their Q4 results this week such as Bank of Baroda, Indian Oil Corporation, Railtel Corporation of India, REC, GAIL, State Bank of India, Hindustan Copper, NTPC, Power Grid Corporation of India, and Bharat Electronics.

What to expect this week: Market watcher Vinod Nair, Head of Research at Geojit Financial Services, said that over the week, the domestic market was influenced by global market trends that revolved around US inflation numbers and job data. The moderation of US inflation below 5 per cent, he said, provided a welcome relief for investors, indicating that the Federal Reserve's efforts to raise interest rates had effectively managed inflation levels. "However, weak macroeconomic data, such as elevated jobless claims and a modest increase in producer prices, raised concerns about slower economic growth, dampening market sentiment towards the latter half."

Nair further said that oil prices extended their decline due to demand concerns in the US and China. "The consistent inflow of funds from foreign institutional investors due to falling US bond yields and the weakness of the dollar helped in controlling the downward pressure in the domestic market. India’s inflation for April, which has moderated to 4.7 per cent, will have a positive impact on the market next week."
 
US market data: On the global front, investors would be eyeing a few economic data from the US such as Fed Bostic Speech, NY Empire State Manufacturing Index (May 15), retail sales ex-autos, Redbook Index, Industrial Production, Manufacturing Production (May 16), Building permits (May 17), Initial Jobless Claims (May 18) and Baker Hughes Total Rig Count (May 19).

Technical Outlook for Nifty: Rupak De, Senior Technical Analyst at LKP Securities, said that on Friday, the Nifty index began the trading session with a weak note and experienced volatility throughout the day. However, he said, an important technical indicator, the Relative Strength Index (RSI), showed a bullish crossover, indicating potential upward momentum in the market. "Closing above the significant level of 18200, the Nifty sustained its position, which is considered a positive sign for the market. As long as the index remains above this level, the overall trend is expected to remain positive."

"Looking ahead, it is important to keep an eye on the resistance level at 18400. If Nifty manages to surpass this level, it could further reinforce the positive trend. However, if the index falls below the support at 18200, it may signal a potential weakness in sentiment and raise concerns about the ongoing bullish outlook," he said.

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