Mumbai, Feb 12
Macro-economic inflation data, amidst the last batch of third quarter results, along with global cues are expected to chart the movement of the equities markets during the upcoming week.
Moreover, trends in the ongoing state assembly elections, followed by the trajectory of the Indian rupee and global commodity prices, will decide investors' position.
"Investors are expected to closely follow cues such as the quarterly results and the domestic economic data during the upcoming week and the price movement of the Indian rupee," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
"Indian equity markets are likely to be volatile due to profit booking. Sector specific price movement is expected on account of the third quarter results among other developments."
Deepak Jasani, Head of Retail Research with HDFC Securities, pointed out that the release of macro-economic inflation data points -- Consumer Price Index (CPI) and Wholesale Price Index (WPI) -- will be other major events during the week starting February 13.
"CPI and WPI numbers for January will be looked forward to on February 13 and 14 respectively," Jasani said.
"Indian markets will react to the disappointing IIP (Index of Industrial Production) data which was released after the markets closed on Friday."
As per the IIP data released by the Central Statistics Office (CSO) last Friday, India's factory output contracted by (-)0.4 per cent during December, a month after the government went in for demonetisation.
The contraction was mainly on account of a 2 per cent decline in manufacturing output, which has the maximum weight in the overall index.
Besides, the trade during the week ahead will be heavily influenced by the corporate earnings for the third quarter of FY 2017.
Companies like the Hindalco Industries, Hindustan Petroleum, Reliance Infrastructure, Adani Enterprises, DLF, Sun Pharma, Tata Motors, Vedanta, Voltas, Motherson Sumi Systems, National Aluminium Company (Nalco) and Power Finance Corporation are expected to announce their quarterly results in the coming week.
"Investors will continue to focus on final batch of Q3FY18 result announcements," elaborated Vijay Singhania, founder and Director of brokerage firm Trade Smart Online.
"More than 300 companies are expected to announce their earnings in the coming week. The focus will continue on management commentary for guidance and outlook for the way forward."
Market observers noted that the voting trends witnessed during the Uttarakhand and Utar Pradesh elections will be of keen interest to the investors.
"A BJP win in Uttar Pradesh will have a positive impact on the stock markets, as the state will give the ruling government more strength in the Rajya Sabha and pursue more pro-economy steps," Singhania said.
"At the same time, the results will be seen by the markets as an indication of trends for the 2019 general elections."
In addition, the trajectory of the Indian rupee and foreign fund inflows will be other major themes for the coming week.
On a weekly-basis, the Indian rupee strengthened by 44 paise to 66.88 against a US dollar from last week's close of 67.32.
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) purchased stocks worth Rs 531.06 crore, while domestic institutional investors (DIIs) bought scrip worth Rs 1,298.34 crore.
Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) bought equities worth Rs 842.49 crore, or $125.32 million, from February 6-10.
On technical-levels, the NSE Nifty could run into resistance at the 8,820-8,870 points band.
"On falls 8,640 points could provide support to the markets. Realty, power, IT and capital goods sectors could perform well in the coming week," Jasani explained.
Last week, the key domestic indices made gains of around half a per cent each, as positive global cues coupled with a strong rupee, higher crude prices and inflow of foreign funds, kept investors' sentiments upbeat.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE gained 93.73 points or 0.33 per cent to close at 28,334.25 points.
Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) rose by 52.6 points or 0.60 per cent to 8,793.55 points.
(Rohit Vaid can be contacted at [email protected])
