The market continued to witness whipsaws this week, but remained within range as the broader sentiment showed restraint given the absence of any significant developments across both macros and company-specific domains.
“Banking becomes a deciding factor going ahead. A follow up move in the coming sessions would definitely push the Nifty towards its much awaited milestone of 16,000 and may even extend towards 16,200 later. Hence, it would be interesting to see how things pan out in the banking space, said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.
“As far as supports are concerned, the immediate levels are placed at 15,700 – 15,670 and the base is to be seen at 15,450 now. Till the time the market defends these important supports, the short term trend remains bullish.”
Despite concerns around rising headline and core inflation, markets have largely remained unfazed. While they continued their joyride, the commodity space is headed down a different path.
Fed Chairman Jerome Powell’s testimony before the US Congress, month expiry of derivative contracts and
‘ 44th annual general meeting kept the volatility high across the bourses.
Here are key factors that may steer the market this week:
IIP and fiscal deficit data
India will release its industrial output and fiscal deficit for May in the coming week. Industrial output is likely to increase on a year-on-year basis on the back of a lower base. However, economic and industrial activities were affected in most Indian states during the second wave of lethal coronavirus.
Industrial output in India had expanded for the second consecutive month in April 2021 owing to a low base effect because of the COVID-induced lockdown that hit economic activities last year.
A higher than expected reading should be taken as positive for the Indian rupee, while a lower than expected reading should be taken as negative.
Two listings
The week will kick off with listing of two companies. Secunderabad-based Krishna Institute of Medical Science (KIMS) and Hyderabad-based Dodla Dairy will make their debut on Monday.
The Rs 909-crore IPO was subscribed 45.62 times. The company sold its shares in the price band of Rs 421-428. KIMS’ IPO garnered Rs 2,144 crore from the primary market at a price of Rs 815-825 per share. The issue was subscribed 3.86 times.
June auto sales
After a sharp slump in May, the domestic auto industry is unlikely to see much relief in the near future as most factories, especially the ones located in South, are operating at limited capacities due to lockdowns and low demand.
Auto sales in May witnessed a steep fall due to factory closures and regional lockdowns enforced to contain the second wave of the pandemic. Auto companies had cut production as a limited number of manpower was available in factories.
Companies like
, Tata Motors, Ashok Leyland, Bajaj Auto, Hero Motocorp and Eicher Motors will be on the radar of investors.
Crude oil prices
Global crude oil prices are expected to be in the $75-80 per barrel range till September, CARE Ratings said in a report on Thursday. Higher crude oil prices indicate more pressure on India’s fiscal deficit, which has high dependency on imports for its energy needs. Expensive crude oil will increase the inflation burden for India.
Pace of monsoon
Parts of northwest India, including the national capital region, are likely to experience wet conditions in coming days, said officials of the India Meteorological Department (IMD).
Weather scientists said on Saturday that the monsoon was unlikely to progress towards Delhi-NCR and neighbouring states of Haryana, Uttar Pradesh, Rajasthan and Punjab for at least a week as it was entering a “break spell” from June 29.
Covid cases
India’s tally of daily Covid-19 cases has witnessed a steep fall in the last few weeks. The daily Covid-19 cases in the country is hovering around the 50,000 mark. It is a big relief for authorities as well as Dalal Street traders.
India reported 50,040 new cases in the last 24 hours, according to data released from the ministry of health and family welfare. The number of active cases declined to 5,86,403. The country’s rate recovery rate rose to 96.75 per cent. However, the increasing cases of new variants like delta and delta plus are a big concern.
Q4 earnings
India Inc is entering its last leg of March quarters earnings. Companies like
, , General Insurance Corporation of India, IRCTC, Dish TV, Ruchi Soya, Indian Rail Finance Corporation, , NLC India will announce their Q4 results in the coming week.
Technical outlook
Nifty50 has been trading sideways for almost three weeks now. It seems to be facing a temporary halt after a period of outperformance. Overall market sentiments in global indices look positive and eventually Nifty is also likely to catch up. After a strong bounce back from 15,450, this zone is now being established as a crucial short-term support, said Nirali Shah, head of Equity Research, Samco Securities.
“We suggest traders maintain a bullish bias on the market and remain watchful for any break of the crucial support, as this would lead to weakness in the short term,” she added.
US PMI and Job data
The world’s largest economy will release its preliminary manufacturing and service PMI data in the week ahead. It will be an important factor to watch out for. Jobless claims data, to be released on July 1, is also awaited by investors. Fewer Americans had filed new claims for unemployment benefits as the labor market steadily recovers from the pandemic, but a dearth of willing workers could hinder faster job growth in the near term.
