PremiumListen to this article |
Indian stock markets last week fell on a a weekly basis on fears of aggressive rate hikes by central banks globally. The Nifty50 index and Sensex benchmarks were down more than 1% for the week, ending at 16,049 and 53,760 respectively. For the coming week, global cues, rupee's movement and financial results and foreign fund movement would be the key factor to watch, say analysts.
On Friday, Wall Street staged a big rebound after data showed that US consumers continue to spend more in the latest signal of the economy's resilience despite high inflation and rising interest rates. SGX Nifty futures were above 16,200 levels, indicating a firm start for Indian markets on Monday.
On the earnings front, market will react to HDFC Bank's numbers on Monday, while Ambuja Cement, HUL, IndusInd Bank, HDFC Life and Wipro will be the other prominent names for Q1 earnings this week, say analysts.
Reliance Industries will announce its earnings on Friday.
HDFC Bank, which announced earnings on Saturday, said its net profit for the three months to June rose 19% from the same period a year earlier, as provisions for bad loans dropped and loan growth picked up. HDFC Bank, one of the big lenders to report first-quarter results, has seen loan growth and asset quality improve as business returned to normal after a pandemic slump.
“Investors should keep a close watch on the currency market. Further, with the earnings season in full swing, market players should avoid reading too much into India Inc.'s numbers and instead focus on the management commentary," said Apurva Sheth, Head of Market Perspectives, Samco Securities.
On the global front, says Santosh Meena, Head of Research, Swastika Investmart, the ECB and Bank of Japan's decision on interest will be an important factor whereas the movement of the dollar index will remain a critical factor. The market will also have an eye on commodity prices and the behavior of FIIs, he added.
In Indian markets, foreign portfolio investors (FPIs) continue to be net sellers though they have slowed down their pace of selling, They have pulled out over ₹10,000 crore this month in cash market, following a net withdrawal of ₹58,00 crore from equities in June.
Technically, says Santosh Meena, Head of Research, Swastika Investmart, the Nifty faces resistance in the 16200-16300 supply zone but the overall structure is bullish till the Nifty trades above the 15700 level. “If Nifty manages to take out the 16300 resistance level then we can expect a rally towards 16500/16600 levels. On the downside, 15900/15800/15700 are multiple support levels," he said.
“If we look at the derivative data then the long exposure of FIIs in the index future is at 17% which is still in the oversold zone but put call ratio is at a comfortable level of 1.21. India VIX is continuously trading below 200-DMA which is giving confidence to the bulls," he said.
Bank Nifty, Mr Meena said, also witnessed a pullback from the 35500 hurdle however 34500-34000 is a strong demand zone for a bounceback. On the upside, “33150/35500 are immediate hurdles then 36000-36300 will be the next critical resistance zone."