• Fri. Dec 1st, 2023
Q1 earnings, global cues and more: Key stock market triggers next week

Domestic market sentiment was given a reprieve last week by positive global cues amid expectations that the US Federal Reserve may pause rate hikes after July after leading domestic indices Sensex and Nifty settled at their fresh record closing highs in the previous session. IT majors Tata Consultancy Services (TCS) and HCL Technologies kicked off their Q1 FY24 earnings season on July 12, reporting mixed-to-muted results.

Steady foreign capital inflows and the weakness of the US dollar also kept the market higher. The dollar fell to a 15-month low against major peers on Friday, with US Treasury yields trading at multi-week lows after their steepest weekly decline in four months, news agency Reuters reported.

The Sensex rose 502 points, or 0.77 percent, to close at 66,060.90 – the index’s fresh record close. Shares of Infosys, TCS and HCL Tech were the top contributors to the gains in the Sensex index. The Nifty 50 hit an all-time high of 19,595.35 in intraday trade, up 151 points, or 0.78 per cent, to close at a record close of 19,564.50.

Markets are awash in positivity as US inflation fell more than expected last month, with strong expectations that the Fed will pause rate hikes after raising rates by 25 bps on July 26. On the domestic market, India’s consumer price index (CPI) inflation rose for the first time in five months to 4.81 percent in June – higher than expected due to a lower support base and a jump in vegetable prices.

“The broader Indian market traded positively, hitting an all-time high, on expectations of upbeat Q1 results, steady FII inflows, lower wholesale prices and lower volatility.” Sectorally, Nifty Bank is weak as it started the earnings season on a low note. However, investors are eagerly waiting for more earnings reports in the coming week to determine their trading direction,” said Vinod Nair, Head of Research, Geojit Financial Services.

Going forward, the primary market is in for a busy week with two public issues for bidding and four listings lined up for the bourses. Analysts suggest that next week’s Q1 results, which will line up with global cues, will largely drive market movement next week. Here are the key triggers for the stock market next week:

Q1 earnings

Banks will account for the largest chunk of earnings in the coming week as financial services account for over 40 percent of the benchmark index. A few tech companies in the large-, mid-, and small-cap groups will also report earnings next week. Some of the leading companies reporting Q1FY24 results next week are: HDFC Bank, LTIMindtree, IndusInd Bank, ICICI Lombard General Insurance, L&T Technology, Bank of Maharashtra, Hindustan Unilever, Infosys, JSW Steel, HDFC Life Insurance, Ashok Leyland, Glenmark Leyland Sciences, Ultratech Cement, Ramkrishna Forgings etc.

2 IPOs, 4 new listings to hit D-Street

Netweb Technologies IPO: In the mainboard segment, computing solutions provider NetWeb Technologies will open its initial public offering on July 17 with its price band. 475-500 per share. The issue will remain open till July 19 and will consist of a fresh issue of par value shares 206 crore and its existing promoters and shareholders selling up to 85 lakh shares. At higher band prices, the company is expected to raise 631 crore through IPO.

Asarfi Hospital IPO: The second IPO in the coming week is Asarfi Hospital from the SME segment. The issue will open on July 17 and close on July 19, a price band 51-52 per share. The Jharkhand-based healthcare facility provider intends to raise 26.97 crore from the public issue of 51.8 lakh shares in the higher price band comprising only fresh issue.

Of the new listings, four will be in the SME segment, with none new in the mainboard segment.

Digital technology services company Accelerate BS India The polymer-based profiler will also debut next week at BSE SME on July 19. Kakka Industries BSE will make its debut on the SME platform on July 20. Drone destination And AhSolar Technologies It will be listed on the NSE SME Emerge and BSE SME platforms respectively next week on July 21.

Arrival of FII

Sustained inflows of foreign investors backed by positive global trends were among the key drivers of record highs scored by equity markets last week. Foreign institutional investors (FIIs) widened their buying spreads and invested more 2,636 crore in Indian stocks on Friday. On the other hand, domestic institutional investors (DIIs) extended their selling with almost outflows. 772.5 crores.

“The subdued inflation in the US has fueled investors’ optimism that a 25-bps rate hike will be enough to stabilize the US economy.” This improved outlook helped Indian IT stocks buy strongly despite muted Q1 earnings. “Furthermore, the broad-based rally in the domestic market was supported by India’s third consecutive month of decline in wholesale prices and good participation by FIIs,” said Geojith Nair.

oil price

Crude oil benchmarks posted their straight weekly gain as the dollar strengthened and oil traders booked profits from a strong rally on soft US inflation. Last week, oil prices were at record highs as they hit three-month highs. Brent, the global oil benchmark, rose above $80 a barrel after US inflation data suggested the rate-hike cycle in the world’s largest economy was nearing an end.

Oil prices are now up 12 percent in two weeks due to supply cuts from Saudi Arabia and Russia. Top producer Saudi Arabia pledged to cut production by 1 million bpd in August.

Analysts predict a resumption of the rally next week as easing inflation, plans to refill the US strategic reserve, supply cuts and disruptions will support the crude oil market.

Corporate action

DCM Shriram, Fortis Healthcare, Graphite India, HCL Tech, Novartis India, TCS, Abbott India, Tech Mahindra, Cipla, Blue Star, Dabur and many more will trade ex-dividend next week. Tangamail Jewellery, Anmol India, a leading leasing finance and investment company, will trade ex-bonus next week. Ashapuri Gold Ornament, Tejnaksh Healthcare and Square Four Projects India will trade flat next week, according to BSE data.

Technical view

The performance of the banking and IT pack will largely determine the trend. Crucial close above 31,600 in Nifty IT index and stability above 44,500 in Nifty Bank will add momentum. The positive tone of the US market is also helping to maintain the bullish bias, and analysts suggest that a breakout above 34,600 in the Dow Jones Industrial Average (DJIA) will further add to the sentiment.

“As Nify has ended its week-long consolidation phase, it looks like it will now test 19,750 and eventually move towards a new milestone of 20,000. In case of shortfall, 19,100-19,3000 cushion will be provided. “Participants should align their positions accordingly, focusing on stock selection and risk management,” said Ajit Mishra, SVP – Technical Research, Religare Broking.

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