Indian equity markets will be driven by statistics on industrial production and inflation, quarterly profits from key technology companies, and global trends, during the holiday-shortened week, analysts predicted.
India’s factory output, inflation data along with major Q4 earnings of IT companies alongside global trends will dictate the market from April 10th to 13th. Additionally, foreign funds flow, movement of rupee, and crude oil prices performance will also have their share of setting the tone, said analysts.
“Leading IT companies TCS and Infosys will report their results this week. Due to concerns about a worldwide recession, markets will pay close attention to management commentary. US inflation and non-farm payroll figures will be important things to keep an eye on the global front. In addition to FIIs’ actions, other crucial market-determining variables include the movement of crude oil prices, the dollar index, and US bond yields,” Santosh Meena, Head of Research at Swastika Investmart Ltd, said.
The stability on the global front has reduced some pressure, according to Ajit Mishra, VP of Technical Research at Religare Broking Ltd. The attention will now move to earnings for cues.
Trading in the Indian market will be closed on April 14 on the occasion of Dr Baba Saheb Ambedkar Jayanti.
Q4 Earnings
TCS will announce its quarterly earnings on Wednesday, while Infosys on Thursday.
Besides these 2 companies, HDFC Bank and Delta Corp will release their 4th quarter numbers next week.
Economic Indicators
The crucial consumer price inflation numbers for March will be released in both India and the US next week. This will be closely monitored by investors.
In India, after easing a bit in November and December, the headline inflation moved above the RBI’s upper tolerance band of 2-6% in January and February.
On Wednesday, macroeconomic data for industrial production for February and March’s inflation rate are expected to be released, PTI said.
WPI inflation data for March would be announced on Friday.
“Federal Open Market Committee (FOMC) meeting minutes are to be announced this week, which can have an impressive effect on the global market. Investors are looking for signs of a future FED interest rate pause, which can have a positive impact on the global market, else vice versa,” Vinod Nair, Head of Research at Geojit Financial Services, said.
FOMC Minutes
On April 12, minutes of the US Federal Reserve’s March meeting will be released. In its March meeting, the Fed raised interest rates by 25 basis points and said that further policy measures are essential to bring down inflation to the long-term target of 2%.
FIIs
With some sanity returning to equities, foreign portfolio investors have been net buyers of shares. For 6 consecutive sessions, FIIs were net buyers and net bought shares worth around $168 million so far in April.
“The basic reason for the change in FPI stance is the declining dollar index and falling bond yields in the US. Also the rupee has been appreciating in recent days from around 82.75 to 81.74 now. This trend is likely to gather momentum,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.
Nifty Technical
According to Mishra, the last two weeks of the rebound has certainly eased pressure but we need a decisive close above 17,700 in Nifty for a short-term trend reversal. Banking, financials and FMCG majors have played their part in the initial leg of recovery and now contributions from other key sectors like energy, IT and auto would be critical to help Nifty to retest 18100+ zone. In case of any profit-taking, 17200-17400 zone would offer the needed support. Meanwhile, we recommend continuing with “buy on dips” approach, with focus on risk management citing rise in volatility due to upcoming earnings season.
Deepak Jasani, Head of Retail Research, HDFC Securities believes Nifty could rise some more towards 17800 over the next few sessions while 17428 could offer support.
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