by admin | May 25, 2021 | Banking, Economy, Markets, News
By Rohit Vaid,
Mumbai : The Reserve Bank of India’s (RBI) second monetary policy review for 2018-19, combined with the direction of foreign fund flows and global crude oil prices are expected to set the course for the key equity indices in the coming week.
Market participants will follow the monsoon’s progress and the rupee’s movement against the US dollar for further cues, analysts opined.
“With the earnings season almost coming to an end, the markets next week would look forward to the RBIs monetary policy,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
The Monetary Policy Committee (MPC) of the RBI is slated to meet from June 4 to 6 for the second bi-monthly monetary policy statement for 2018-19.
In its last review, the country’s central bank had maintained the status quo on its key short-term lending rate at 6 per cent, along with its “neutral” stance.
“Given the higher GDP growth rate released last week, the chances of a policy rate hike has risen, though not assured, as RBI would take a wait-and-watch approach,” Nevgi said.
“A rate hike, if it comes accompanied by hawkish policy language, would hit the market sentiment, especially the banks and the NBFCs.”
According to SMC Investments and Advisors’ Chairman and Managing Director D.K. Aggarwal: “Now markets across the globe are closely watching each development regarding US trade policy, Italy ‘s politics and the dynamics unfolding in the global crude market.”
The National Stock Exchange’s (NSE) 50-share “Nifty is expected to move in the range of 10,500-10,900 levels and Bank Nifty is expected to trade between 26,300-27,200 levels”, he added.
Besides, fluctuations in global crude oil prices, along with the movement of Indian rupee against the US dollar and the composite PMI data will also affect investor sentiments.
On a weekly basis, the rupee strengthened by 72 paise to close at 67.06 against the US dollar from its previous week’s close of 67.78 per greenback.
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 2,707.41 crore during the last trade week.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 2,756.63 crore, or $405.08 million, during the week ended June 1.
As per the technical charts, the underlying trend of NSE Nifty50 remains bullish.
“Technically, the Nifty seems to have taken a breather after two sessions of gains,” said Deepak Jasani, Head of Retail Research for HDFC Securities.
“With the underlying trend remaining up, the bulls seem to have an upper hand for the coming week. Further upsides are likely once the immediate resistances of 10,765 points are taken out. Crucial supports to watch for any weakness are at 10,620 points level.”
Last week, both the key Indian equity indices — S&P Bombay Stock Exchange (BSE) Sensex and NSE Nifty50 — edged higher on the back of a healthy improvement in the country’s GDP growth rate, along with predictions of a normal monsoon and easing crude oil prices.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 302.39 points or 0.87 per cent to 35,227.26 points.
Similarly, the wider Nifty50 of the NSE closed the week’s trade at 10,696.20 points — up 91.05 points or 0.86 per cent — from its previous close.
(Rohit Vaid can be contacted at rohit.v@ians.in)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Rohit Vaid,
Mumbai : Fluctuations in the global crude oil prices, along with the rupee’s movement against the US dollar and the upcoming macro-economic data points are expected to chart the course of the key Indian equity indices during the coming week.
According to market observers, other factors such as the ongoing quarterly results season and the direction of foreign fund flows will also impact investor sentiments.
“The fall in crude oil prices… should help to soothe the market and the INR sentiment,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
“The global situation on North Korea and the US-China trade spat would also be closely watched.”
Lately, high crude oil prices and geopolitical developments have pushed the domestic fuel prices higher and weakened the Indian rupee.
However, a reversal in the rupee’s trajectory was seen late last week as it strengthened by 23 paise to close at 67.78 against the US dollar. Even domestic fuel prices are expected to fall after the Brent crude cost eased to around $76 from $78 per barrel last Friday.
Additionally, the direction of foreign fund flows will play a key role to determine the market movement. Last week’s provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 3,227.06 crore.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested equities worth Rs 2,988.86 crore, or $438.81 million, in the week ended May 25.
“Any negative emerging markets’ sentiment will adversely influence the Indian markets too. The domestic institutional investors have become the new anchors of the Indian markets given its matching net purchases to the net FPI sales,” Nevgi said.
Besides, crucial data points on the country’s ‘Fiscal Deficit’, ‘Index of Eight Core Industries’ and the Q1 GDP growth rate will be keenly watched by the market participants.
“Decelerating macro trends like increase in bond yield, rising inflation, INR depreciation and gap in current account deficit might impact market performance over the medium term,” said Vinod Nair, Head of Research at Geojit Financial Services.
“This will lower the premium valuation of India…”
Apart from the macro-data points, companies like L&T, NHPC, NMDC, NTPC, BHEL, BPCL, Coal India, Indian Overseas Bank and Mahindra & Mahindra are expected to announce their fourth quarter (Q4) earning results in the coming week.
“Given the weakening macro scenario and likely inflationary pressure in coming months due to crude oil prices, direction of market is completely dependent upon the earnings trajectory of companies,” said SMC Investments and Advisors’ Chairman and Managing Director D.K. Aggarwal.
“Going forward, unfavourable developments on the macroeconomic front may dent the confidence of the market participants.”
On technical-charts, any further upsides in NSE Nifty 50 which has rallied for two consecutive sessions till last Friday are seen after the immediate resistance level of 10,628 points is crossed.
“Technically, with the Nifty rallying for the second consecutive session on Friday, traders will need to watch if the recent gains can sustain early next week,” said Deepak Jasani, Head of Retail Research for HDFC Securities.
“Further upsides are likely once the immediate resistance of 10,628 points is taken out. Crucial supports to watch for resumption of weakness is at 10,417 points.”
Last week, both the key Indian equity indices — S&P BSE Sensex and NSE Nifty 50 — made marginal gains on the back of attractive valuations, as well as a fall in global crude oil prices and appreciation in the Indian rupee.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE rose by 76.57 points or 0.22 per cent to close at 34,924.87 points on a weekly basis.
Similarly, the wider Nifty50 of the NSE closed the week on a slightly positive note. It closed at 10,605.15 points — up 8.75 points or 0.08 per cent.
(Rohit Vaid can be contacted at rohit.v@ians.in)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Rohit Vaid,
Mumbai : Persistently high global crude oil prices, along with the rupee’s movement against the US dollar and the ongoing quarterly results season are expected to drive the trajectory of the key Indian equity indices in the coming week.
However, analysts predict a negative reaction from investors on the formation of a non-BJP government in Karnataka and any further outflow of foreign funds.
“Markets will closely track the floor test results in Karnataka,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
“Globally USD, US interest rates and crude oil prices need to be monitored due to their influence on the local markets.”
Apart from Karnataka politics, crude oil prices which have lately been around the $80 per barrel-mark are expected to impact investor sentiments.
As per the latest estimates of the Finance Ministry, the rise in oil prices may inflate India’s import bill by around $25 billion to $50 billion. The surge has already pushed the cost of petrol in the national capital to Rs 75.32 per litre.
Besides, the rupee’s price movement against the US dollar will also be crucial for the market, especially in the backdrop of a continuous outflow of foreign funds.
“Rupee continues to weaken against the US dollar as outflows continue across the emerging markets. However, high oil prices and political risk premium in a pre-election year is ensuring that the rupee remains as an underperformer in the EM basket,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.
“Developments in Karnataka are not going to have any lasting adverse impact on the rupee bit come Monday, but there is a risk of a knee-jerk sell-off in the INR against the USD.”
On a weekly basis, the Indian rupee weakened by 68 paise to close at 68.01 against the US dollar from its previous close of 67.33 per greenback.
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 1,496.79 crore during the trade week ended May 18.
According to the National Securities Depository (NSDL), foreign portfolio investors (FPIs) divested equities worth Rs 799.88 crore, or $117.63 million.
In addition to the rupee’s movement, companies like Bata India, Bharat Forge, Bosch, Cipla, Dr Reddys Lab, Future Consumer, IndianOil, State Bank of India, Jet Airways and Tata Motors are expected to announce their fourth quarter (Q4) earning results in the coming week.
“We are also expecting to see a mixed bag of result for Q4 going forward. With Q4 results below estimates, there are concerns of downgrade in FY19 estimates,” said Vinod Nair, Head of Research at Geojit Financial Services.
Technical charts showed the National Stock Exchange’s (NSE) Nifty50 in a downtrend.
“Technically, with the Nifty ending lower for the fourth consecutive session and closing below the short term trend reversal levels of 10,630 points, the underlying uptrend has reversed,” said Deepak Jasani, Head of Retail Research for HDFC Securities.
“The coming week could see further downsides towards 10,514 points and lower. On the upside bounces, 10,692 points-level can offer resistance.”
The political stand-off in Karnataka, consistent rise in global crude oil prices and outflow of foreign funds, pulled the key Indian equity indices deep into the red in the week just-ended.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE declined by 687.49 points or 1.93 per cent to 34,848.30 points.
Similarly, the wider NSE Nifty50 edged-lower. It ended at 10,596.40 points — down 210.1 points or 1.94 per cent — from its previous close.
(Rohit Vaid can be contacted at rohit.v@ians.in)
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Rohit Vaid,
Mumbai : Macro-economic data points, coupled with fourth quarter (Q4) earning results, are expected to influence the Indian equity markets during the upcoming truncated week.
According to market observers, the US Fed’s open market committee meet along with the trajectory of global crude oil prices and the rupee’s movement against the US dollar can trigger volatility during the week’s trade sessions.
“The earnings momentum would again be critical since HDFC, Kotak Bank and Dabur will be releasing their numbers. For PSU and other banks, the key question is whether the peak in NPA (non-performing assets) reporting cycle is near,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
Companies like HDFC, Kotak Mahindra Bank, HCL Technologies, Hero MotoCorp, Interglobe Aviation, Marico, Welspun Corp and Adani Ports and Special Economic Zone are expected to announce their Q4 earning results next week.
“Earnings and (the Karnataka) election will be the main triggers for the market while investors will have to keep an eye on domestic headwinds like rise in oil price and rupee movement,” said Vinod Nair, Head of Research at Geojit Financial Services.
“On the other hand, the earnings season has started on a positive note led by private sector banks and IT companies. Global market sentiment will be based on the outcome of two-day FOMC meet which is scheduled to start from May 1.”
Apart from Q4 results, investors will look out for upcoming macro-economic data points such as the eight core industries’ (ECI) output, the country’s fiscal deficit numbers and PMI manufacturing and services’ figures which will be released during the week starting April 30.
“Next week, the fiscal deficit for the full financial year would be available and the data would be scrutinised in detail for any slippages, especially in the month of March,” Nevgi said.
“The PMI would be tracked, too, for the economic progress. Crude prices would be tracked closely for any spurt.”
Nevgi added that DIIs (domestic institutional investors) have supported the market as they remained net buyers, whereas FPIs (foreign portfolio investors) have been net sellers since April 13.
The provisional figures from the stock exchanges showed that during last week, foreign institutional investors (FIIs) sold scrips worth Rs 3,060.41 crore, while the domestic institutional investors purchased stocks worth Rs 2,649.61 crore.
In terms of currency, the rupee weakened by 54 paise to close at 66.67 against the dollar on last Friday.
On technical charts, the underlying trend for the National Stock Exchange’s (NSE) Nifty remains bullish.
“Technically, the near-term trend of Nifty is positive and one may expect further upside in the early part of next week. Nifty could face resistance at the 10,750-10,800 band for the next week,” said Deepak Jasani, Head of Retail Research for HDFC Securities.
Last week, healthy Q4 earnings lifted the benchmark equity indices as they settled at their highest closing levels in over three months.
On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) rose by 554.12 points or 1.61 per cent to close at 34,969.70 points.
Similarly, the wider Nifty50 made gains during the week ended April 27. It closed trade at 10,692.30 points — up 128.25 points or 1.21 per cent from its previous week’s close.
The Indian equity indices will remain closed on Tuesday to observe Maharashtra Day.
(Rohit Vaid can be contacted at rohit.v@ians.in )
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Rohit Vaid,
Mumbai : The ongoing earnings results season, along with the heightened geo-political tensions in the Middle East and a key macro-economic inflation data point are expected to influence the Indian equity markets’ trajectory during the coming week, analysts opined.
“Next week the focus will again be on earnings, with IndusInd Bank setting the tone for bank earnings, especially on the fresh loan loss provisions,” Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
“The oil prices would be watched closely for any flare-up due to geo-political (events). Some of the macro-data has been encouraging, which would keep the sentiment buoyant.”
Companies like ACC, Mindtree, Cyient and Tata Consultancy Services are expected to announce their fourth quarter (Q4) earning results in the coming week.
“The earnings recovery was elusive for the last few years, even though the market scaled new heights at every interval,” Vinod Nair, Head Of Research at Geojit Financial Services, told IANS.
“However, the last two quarters have given some ray of hope to investors for a pick-up in earnings given better-than-expected GDP growth and normalisation in GST implementation. Q4 PAT growth expectation for Nifty50 and Sensex companies is around 15 per cent YoY.”
According to D.K. Aggarwal, Chairman and Managing Director of SMC Investments & Advisors: “The upturn in the economy and a favourable base effect notwithstanding, the Q4FY18 earnings, particularly from FMCG companies, are expected to see a healthy growth.”
“Nifty is expected to move in the range of 10,300-10,600 points and Bank Nifty to trade in the range of 24,700-25,300 points.”
Besides the Q4 results, investors will look out for the upcoming macro-economic data points — Wholesale Price Index — on Monday. The Balance of Trade figures will also influence sentiments. The trade data was released after the close of market hours on Friday.
On technical levels, the underlying trend of the National Stock Exchange’s (NSE) Nifty50 remains bullish.
“Technically, the Nifty remains in uptrend and further upsides are likely once the immediate resistance of 10,618 points is taken out,” said Deepak Jasani, Head of Retail Research for HDFC Securities.
“Crucial support to watch for any weakness is at 10,276 points.”
Last week, the key Indian equity indices — the Bombay Stock Exchange (BSE) Sensex and the NSE Nifty50 — rose for the third consecutive week as healthy macro-economic data as well as fading global trade war fears boosted investors’ sentiments.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE surged by 565.68 points or 1.68 per cent to close at 34,192.65 points.
Similarly, the wider Nifty50 of the NSE)made healthy gains. It closed trade at 10,480.60 points — up 149 points or 1.44 per cent from its previous week’s close.
(Rohit Vaid can be contacted at rohit.v@ians.in )
—IANS
