Domestic data, earnings to guide markets

India’s equity market ended a 3-week long losing streak last week and gained nearly one and a half percent amid mixed cues.

Published: 10th October 2022 09:00 AM  |   Last Updated: 10th October 2022 09:00 AM   |  A+A-

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By Express News Service

NEW DELHI: India’s equity market ended a 3-week long losing streak last week and gained nearly one and a half percent amid mixed cues. The benchmark indices- Sensex and Nifty- shed over 1% points on Monday (October 3) but made gains of over 2% on Tuesday (October 4) before closing the Friday session on a flat note when Rupee fell over 82-level against the US Dollar for the first time. The previous week was almost entirely dominated by future developments related to US Federal Reserve rate hikes.

While global developments, especially movement in the US market and Fed’s commentary on rate hikes, would continue to have a major say in this week, investors would keenly watch domestic developments as well. The three big IT firms -Infosys, Wipro and TCS- will begin the earning season by reporting their Q2FY23 numbers. 

The week is heavily loaded with macroeconomic data such as Index of industrial production (IIP), Consumer price index (CPI) and Wholesale price index (WPI) based inflation for the month of September. 
Ajit Mishra, VP - Research, Religare Broking, said, “In the coming week, participants will be eyeing important macroeconomic data viz. IIP, CPI and WPI for cues. Besides, the week also marks the beginning of the earnings season with IT majors like TCS, Infosys, HCL Tech and Wipro announcing their numbers along with two other heavyweights i.e. Bajaj Auto and HDFC Bank during the week. Amid all, the performance of US markets, FIIs trend, and movement in currency and crude will also remain on their radar.” 

According to Mishra, the recovery in the global indices, especially the US, has triggered the recent rebound but the lack of sustainability in the move is causing excessive volatility.  “However, we feel domestic factors like earnings and macroeconomic data may take the front seat and dictate the trend ahead.  On the benchmark front, the 16,800-17,100 zone would act as a cushion in Nifty while a rebound towards the 17,580-17,900 zone may attract profit taking again,” he added. 

Nifty and Sensex, closed at 17,314.6 and 58,191, respectively, on Friday. Among the key sectoral indices, recovery in the IT majors combined with buying in the banking majors played a crucial role. Apurva Sheth, Head of Market Perspectives, Samco Securities, said that the upcoming week is going to be a roller-coaster ride as a host of important events are slated to release. 

Sheth said that markets across the globe will be dominated by the federal open market committee’s (FOMC) minutes that will be released next week.  “While global investors will be keenly monitoring inflation figures in the United States and China, Indian CPI print will be a key domestic factor to monitor. Further, the Indian IT companies will kick start the quarterly result season. Stock-specific swings will be evident, and when investors respond to earnings misses and beats, they should consider the company’s long-term prospects rather than focusing exclusively on quarterly results,” added Sheth.

Joseph Thomas, Head of Research, Emkay Wealth Management said that what  has been impacting the markets most is the aggressive stance of the Fed which might expose the US economy to a full-fledged economic slowdown.  “Such an event may have consequences for the whole world. The geopolitical tensions which are mainly from Eastern Europe and the decision of OPEC to cut production and supply also challenged the markets. These factors will continue to hold their sway in the coming weeks too.”


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