Sensex, Nifty this week: From India's fiscal deficit to US unemployment rate, factors that may drive Dalal Street

Markets showed a negative trend in the passing week after the US Federal Reserve, the central bank of America, raised interest rates to their highest level in more than two decades. The coming week will mark the start of a new month and traders will be eyeing macro data along with the monthly sales numbers from the auto companies that will keep the markets buzzing. Besides, this week the market will be looking at Q1 earnings from some of the top names in Dalal Street such as State Bank of India (SBI), Bank of Baroda (BoB), Adani Enterprises, Adani Power, Bharti Airtel, Mahindra and Mahindra, Maruti Suzuki India, and Power Grid.
 
Economic events: Investors will be eyeing the macro data, starting with the fiscal deficit and RBI Monetary and Credit Information Review, which is scheduled to be released on July 31. S&P Global Manufacturing PMI number will come out on August 1, S&P Global Services PMI on August 3, and foreign exchange reserves data on August 4.

The Goods and Services Tax (GST) Council is scheduled to meet on August 2 to make crucial decisions on taxing funds collected by online gaming companies and casinos. The council, chaired by Finance Minister Nirmala Sitharaman, will deliberate on whether to impose a 28 per cent tax on the total funds deposited for playing an online game or opt for a tax on each bet placed.

Quarterly Results: In the ongoing earning season, market participants would be majorly looking for earnings from companies like Maruti Suzuki India, Mahindra, and Mahindra, Adani Enterprises, Adani Power, Adani Green Energy, Adani Transmission, UPL, Escorts Kubota, Godrej Agrovet, Godrej Properties, Interglobe Aviation, Metropolis Healthcare, Titan Company, Bharti Airtel, Blue Star, Dabur India, Eicher Motors, Lupin, MRF, Zomato, Zydus Wellness, etc. among others.
Among the PSU firms, SBI, Bank of Baroda, Hindustan Petroleum Corporation, Indian Overseas Bank, Gail (India), Power Grid Corporation of India, and BHEL will release their Q1 results.

US market data: On the global front, investors would be eyeing key economic data in the US, starting with ISM Manufacturing PMI, ISM Manufacturing Employment on August 1, Initial Jobless Claims, ISM Services PMI, ISM Services Employment, Factory Orders, on August 3, Unemployment Rate, Non-Farm Payrolls, and Baker Hughes Total Rig Count on August 4.

Technical Outlook

Nifty: Deepak Jasani, Head of Retail Research at HDFC Securities, said the Nifty closed lower for the second straight day on July 28, pulled down by weak global cues and a series of muted Q1 results. Nifty, after falling in the early part of the session, recovered part of the losses on July 28 and formed a high wave doji pattern after a minor fall. "On the weekly chart, Nifty fell 0.5 per cent over the week after gaining for the previous four weeks. 19,562 becomes a crucial support for the Nifty below which a fall of another 2 per cent could follow and the 17-week rally from the low of 16,828 could be said to have ended. 19748 could be a resistance for the near term."

Bank Nifty: Kunal Shah, Senior Technical & Derivative analyst at LKP Securities, said the bears dominated the market, and the index faced consistent selling pressure from higher levels, indicating a bearish sentiment prevailing in the market. The index managed to close just above its 20-day moving average (20dma), which is currently placed at 45,350.

This moving average acts as a crucial support level, and a break below it could lead to further selling pressure and potentially extend the downtrend. "However, if the index manages to hold above the 20dma, it may find some temporary support, leading to a potential pullback towards 45,700 or 45,800 levels. The pullback could be seen as a short-term relief rally in the prevailing bearish trend," Shah said.

Also Watch: Q1 Results next week: Maruti Suzuki, PowerGrid, Adani Green Energy, Titan Company, Escorts Kubota, PVR INOX, Adani Total Gas, SBI, Varun Beverages, others

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