Quarterly results, global cues, monsoon forecast to drive
markets this week
The Nifty and the Sensex
closed the last week ended April 20 with a small upside – the sectoral indices
IT, metal and FMCY surged while bank was lower, due to the on-going disruption
in the banking sector in India. The 30-scrip
Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) rose by 222.93
points or 0.65 per cent to close at 34,415.58 points. Similarly, the wider NSE
Nifty50 made gains. It closed trade at 10,564.05 points, up 83.45 points or
0.80 per cent from its previous week's close.
This week, market sentiment are likely to be driven by
the monsoon forecast, quarterly results of some key companies, crude prices and
other global indicators. The weather department has forecast that India is
going to receive normal monsoon in 2018, which will further improve market
sentiments. Further companies like
Bharti Infratel, Bharti Airtel, Bajaj Corp, Ultratech, Wipro, Axis Bank,
Biocon, Tata Elxsi, Yes Bank, IDFC, Maruti Suzuki and RBL Bank will come out
with their March quarter numbers this week.
On the macro front, there are no major events lined up
for the coming week.
Global events that will have a bearing on sentiments
include Japanese Flash Manufacturing PMI, European Flash Manufacturing &
Services PMI, US Flash Manufacturing & Services PMI and US Existing Home
Sales data which will be announced in the current week. Also US Crude Oil
Inventories data, ECB Monetary Policy, US Durable Goods Orders and US Unemployment
Claims data will be announced, as also Japanese Industrial Production, BOJ
Monetary Policy, Japanese Housing Starts, UK GDP and US GDP data will be
announced.
Other global cues such as
volatile crude oil prices, along with the policy stance of major global central
banks are expected to guide the Indian equity markets.
Better earnings, improved
sentiment and weaker INR (Indian rupee) would help the IT sector stocks.
Earnings releases of Axis, Yes and HDFC banks would be monitored closely to
assess the trends of incremental NPAs (non-performing assets) recognition in
private banks.
The Indian rupee had
weakened by 92 paise to close at 66.13 against the US dollar for the week ended
April 20. In terms of investments, provisional figures from the stock exchanges
showed that foreign institutional investors sold scrip worth Rs 2,821.24 crore,
while the domestic institutional investors purchased stocks worth Rs 2,124.16
crore during last week. Figures from the National Securities Depository (NSDL)
revealed that foreign portfolio investors divested equities worth Rs 3,096.62
crore, or $471.78 million, during April 16-20.
In the F&O segment, since prices have entered the
supply zone of 10,468-10,702, the probability of a consolidation/correction
from the current level cannot be ruled out with April expiry round the corner.
At present, Nifty has resistance at 10,665, 10,722, 10,798 levels, whereas
on the downside it has support at 10,462, 10,405 and 10,338 levels. In the
coming week, if Nifty50 trades and closes above the 10,607
level, then it is likely to test the 10,665, 10,722 and 10,798
levels. However, if Nifty trades and closes below 10,520 levels, then
it can test the 10,462, 10,405 and 10,338 levels. Broadly, for the current
week, the 10,400 level remains a crucial support for Nifty50. Further upsides
are likely once immediate resistance of
10,632 points is taken out.
Posted by Digamber Lokhande
