Key inflationary trends combined with the ongoing quarterly result season are expected to determine the movement of Indian equity indices this week.
The sharp deceleration in the rate of India’s industrial output growth is also expected have an impact on investors’ sentiments.
Additionally, global cues such as concerns over the rise in crude oil prices and trade talks between the United States and China, along with the direction of foreign fund flows, will affect the risk-taking appetite of investors.
“Going forward, the market will closely watch guidance and management commentary of companies coming out with their earnings,” SMC Investments and Advisors CMD D.K. Aggarwal told IANS.
“Besides, third-quarter results, macroeconomic data, trend in global markets, investment by foreign portfolio investors [FPIs] and domestic institutional investors [DIIs], the movement of the rupee against the dollar and crude oil price movement will dictate the trend of the market going forward.”
In the coming week, companies like Reliance Industries, Cyient, Hindustan Unilever, Rallis India, ICICI Securities, Multi Commodity Exchange of India, Mindtree, SBI Life Insurance Company and Wipro are expected to announce their third-quarter results.
Sahil Kapoor, chief market strategist at Edelweiss Investment Research said: “The breadth of the market suggests that the underlying strength of the broader market is still absent. The NSE500 Index, which is much broader than the Nifty is still trading below its 200 daily moving average.”
“As we move into the thick of the result season the index is likely to see a break of this trading range. If the index were to trade below 10,700 mark a fall towards 10,400 to 10,500 range is likely and a retest of 2018 lows would also rise in probability.”
Apart from the third-quarter results, investors will look out for the upcoming macro-economic data points such as the consumer price index, wholesale price index and the balance of yrade figures.
The Central Statistics Office is slated to release the macro-economic data points of the CPI today.
Besides, a volatile rupee against the US dollar might hamper market’s northward moves.
“The rupee has concerns from rising crude and risk of fiscal slippage in the poll-bound nation… any breach above 70.60 levels can take it to 71.50 levels. On the lower side, 69.80 can be seen if any softness in crude is seen,” said Edelweiss Securities’ head of forex and rates Sajal Gupta.
“Any positive development on the resolution of global trade concerns can be a positive backdrop for the rupee to appreciate in coming week.”