The coming week is going to be crucial for the stock market as it’s the start of the new month and it will be heavily loaded with macroeconomic data and announcements of quarterly results by some major companies.
On the economic front, market participants will closely watch the fiscal deficit data and infrastructure output on October 31, S&P Global Manufacturing PMI and Balance of Trade (preliminary) on November 1, and S&P Global Services & Composite PMI on November 3.
Besides, auto and cement stocks will be reacting to their monthly sales numbers at the start of the week.
Also, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will hold an additional meeting on November 3 to discuss what would be its response to the government on its failure to keep the inflation rate under 6%.
Market watcher Dr. Joseph Thomas, Head of Research at Emkay Wealth Management, said: “The domestic equity market closed the last trading day of the week narrowly higher though some of the key indexes like the Midcap and Small Cap indexes closer much lower. Banking, IT, Metals, and healthcare also closed in the negative. The local indexes are more or less tracking the global indexes, especially the US stock market.”
He said the hike in the base rate by the ECB (European Central Bank) by 75 bps and the likelihood of a rate hike by the hawkish Fed in the FOMC meeting which is scheduled for next week, and the encouraging US GDP numbers are factors that may be of consequence to the markets in the coming week.
"The special additional meeting of the MPC convened by the RBI for November3, 2002, and the possibility of further rate hikes given the persistent inflation is something that market is pondering over with caution at this juncture. We may continue to see some volatility in the markets as we cruise into the new week,” he said.
Apart from capital markets, there will be a buzz in the primary market too as four IPOs aim to raise over Rs 4,500 crore in the coming week. Bengaluru-based DCX Systems Ltd, cardiologist Dr Naresh Trehan-promoted Global Health Ltd, Bikaji Foods International Ltd, and Fusion Micro Finance Ltd IPOs are likely to open for subscription.
The initial public offering (IPO) of DCX Systems, a manufacturer of electronic sub-systems and cable harnesses, is set to open on October 31 and close on November 2. Also, the initial share sale of Global Health, which operates and manages hospitals under the Medanta brand, will open for public subscription on November 3 and will conclude on November 7.
Fusion Microfinance, the New Delhi-based microfinance company will launch its IPO between November 2 and November 4. The price band for the issue has been fixed at 350-368 per share. While Bikaji Foods IPO will go public on November 3 and will close on November 7 under the issue, 35% quota is reserved for the retail class.
Market veteran Mr Vinod Nair, Head of Research at Geojit Financial Services, said: “Volatility of the secondary market has led to a weak IPOs market in 2022 and it is expected to remain subdued going ahead. However, the response of investors in the offered IPOs was decent because of the opportunity to invest in new companies at attractive prices. This was also in the context of high liquidity available from HNIs & retail investors looking for listing gains. In the majority, IPOs were also attractive for institutional investors to invest in high-quality new businesses bringing diversification to schemes."
Investors will also keep an eye on some important quarterly numbers to be released this week. Among the companies that will put out their quarterly results in the coming week are Bharti Airtel, Larsen & Toubro, Tata Steel on October 31, Adani Ports and SEZ, JK Tyre & Industries, Karnataka Bank, Sun Pharma, Tech Mahindra, UPL on November 1, Adani Transmission, Amara Raja Batteries on November 2, HDFC, Hero Motocorp, and Adani Enterprises on November 3, CIPLA, TVS Motor Company, and Titan on November 4, Power Grid and SBI on November 5.
On the global front, investors will be focusing on key economic data from the United States (US) most importantly the Federal Open Market Committee (FOMC) interest rate decision on November 2 as the central bank plans to carry its hiking cycle into 2023. The other key economic data releases would be, Redbook and S&P Global Manufacturing PMI on November 1, API Crude Oil Stock Change on November 2, Balance of Trade, Initial Jobless Claims, S&P Global Services PMI on November 3, and Unemployment Rate on November 4.
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