Sensex, Nifty this week: From F&O expiry to Q2 results, factors that may drive Dalal Street

Indian equity markets ended last week with losses of over a percent amid the crisis in the Middle East and the subsequent rise in oil prices. Besides, a disappointing set of Q2 numbers from IT companies too dampened sentiments. This week, investors will be eyeing key events such as quarterly results of major stocks, Futures and Options (F&O) series expiry, and the latest forex reserves, along with the GDP growth numbers in the US that will keep the markets buzzing.

Economic data: This week is likely to see some volatility with the scheduled F&O series expiry on October 26 and traders balancing their positions going ahead for the next series. On the economic front, investors will be eyeing the data on foreign exchange reserves, scheduled to be released on October 27. India's foreign exchange reserves in India decreased to $584.740 billion on October 6.
 
Quarterly Results: Some stock-specific activity may dominate trade as quarterly earnings are released. Tech Mahindra, ACC, Asian Paints, Colgate-Palmolive, Coromandel International, Jindal Saw, NLC India, Reliance Industrial Infrastructure (RIL), Cipla, Dr Reddy's Laboratories, Indian Hotels Company, Maruti Suzuki India, Bharat Electronics, NTPC would report their earnings during the week.

In the banking and finance sector, Axis Bank, Indian Overseas Bank, Mahindra and Mahindra Financial, Bajaj Finserv, Bajaj Holdings And Investment, SBI Cards and Payment Services, SBI Life Insurance Company, and Union Bank of India will report their Q2 earnings.

US market data: On the global front, investors would be eyeing important economic data from the United States, starting with the Chicago Fed National Activity Index on October 23 followed by Redbook, S&P Global Composite PMI, S&P Global Manufacturing PMI, S&P Global Services PMI on October 24, Building Permits Final on October 25, GDP Growth Rate, Initial Jobless Claims on October 26, Personal Income, Michigan Consumer Sentiment, Baker Hughes Oil Rig Count on October 27.

Trend in global markets: Deepak Jasani, Head of Retail Research at HDFC Securities, said, "Nifty fell for the third consecutive session on Oct 20 pulled down by weak global cues. Global equities fell and oil and gold prices climbed as investors responded to the threat of a weekend escalation that would spread the conflict between Israel and Hamas to the wider Middle East region. The sight of US government bond yields hitting 5 per cent for the first time since 2007 amid an increasingly threatening conflict in the Middle East left investors searching for safety."

Technical Outlook: Nifty fell on Friday showing persistent weakness. However, it has formed a doji after a fall, suggesting the possibility of a bounce. “On weekly charts, it fell 1.06 per cent. 19432-19492 bands could provide support to the Nifty in the near term while 19730 could be tough to breach on up moves,” Jasani said.

Bank Nifty: Kunal Shah, senior technical and derivative analyst at LKP Securities, said that the Bank Nifty index had been locked in a persistent struggle between bullish and bearish forces, resulting in a period of consolidation that had extended for the past two days. "The index is currently teetering at a crucial 'make-or-break' point. The level of 43,500 is regarded as decisive. A breach below the 43,500 level is anticipated to trigger additional selling pressure in the market. On the other hand, if this level manages to hold on a closing basis, it could prompt a substantial short-covering rally. The potential target for such a move is around 44500, where there is a notable accumulation of open interest on the call side."

Also Read: Q2 Results 2023 this week: RIL, Axis Bank, TechM, Maruti Suzuki India, BPCL, and more