MUMBAI: The benchmark Nifty is likely to move in a 3.2% range of 15940-16458 with quarterly results deciding the trend. Build-up by options traders indicates an upward bias for starters from Friday's close of 16220.6, though all eyes will be on the market's reaction to TCS' Q1 numbers. India's largest software exporter saw EBIT margin plummet to a multi-year low of 23.1% on higher wage and subcontractor costs and rising attrition even as revenue growth beat Street estimates.
Apart from TCS, market trends will be driven by some important numbers this trading week that include HCL Tech, Mindtree, Larsen & Toubro Infotech, ACC and Federal Bank. HDFC Bank will report numbers on Saturday which will set the tone for the forthcoming week. FII selling in the cash market seems to be declining even as they cover their bearish bets on index futures - Nifty and Bank Nifty.
"Early trends in FPI activity in July indicate declining selling by FIIs," said VK Vijayakumar, chief investment strategist at Geojit Financial Services. "For the first time in several weeks, FPIs bought equity worth `2150 crore on 6th July. There are signs of selling exhaustion by FPIs." The Nifty has fallen 7% from 17465 through 16220.6 last Friday with FIIs selling $14.37bn of Indian shares. The index would have cracked even more had DIIs not tried to match the FII selling.
Analysts said FIIs would take cues from the Indian stock market based on the rupee, which has depreciated over 4% from March-end through 79.26 last Friday. The rupee itself would take cues from crude prices. Steady to falling crude prices could stem the fall in the rupee. India's foreign currency assets, making up the bulk of its forex reserves, have dwindled by $16bn from March-end through July 1 to $524.74 billion. This decline was caused by RBI intervening to stem the excess volatility in the rupee and revaluation of reserves as FCA is dollar-denominated.