Rising oil output may ease supply fears
mumbai — The upcoming quarterly results season, along with macro-economic data points on industrial output and inflation, will determine the trajectory of the key Indian equity indices in the week ahead.
According to market analysts, developments on further imposition of trade protectionist measures between the US and China coupled with volatility in crude oil prices and the rupee’s movement against the US dollar will also affect investor sentiments.
The Q1, 2018-19, earnings result season will kick off from next week. IT major Tata Consultancy Services (TCS) is expected to be the first bluechip firm to come out with its Q1 result on July 10.
Other companies like Infosys, IndusInd Bank, Cyient and Indian Overseas Bank are also expected to announce their Q1 earning results in the coming week.
“The markets next week would look forward to the commencement of the earnings season with large caps like TCS, Infosys and banks like IndusInd and Kotak about to declare their earnings,” Devendra Nevgi, founder and principal partner, Delta Global Partners, told IANS.
“The IT sector earnings will be in focus, given its recent performance, INR weakness and the buoyant US economy.”
Apart from the Q1 results, investors will look forward to the macro-economic data points of IIP (Index of Industrial Production), Consumer Price Index (CPI) and India’s trade figures.
The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI on July 12.
“CPI inflation and IIP data will be keenly watched, consensus expects June CPI rise to 5.2 per cent versus 4.87 per cent and May IIP is expected improve to 5.9 per cent versus 4.9 per cent,” Geojit Financial Services’
The IT sector earnings will be in focus, given its recent performance, INR weakness and the buoyant US economy Devendra Nevgi, founder and principal partner, Delta Global Partners
Research Head Vinod Nair told IANS. Besides, the movement of Indian rupee against the US dollar and the direction of foreign fund flows will also set the course for the key indices.
On a weekly basis, the Indian rupee closed at 68.88, weaker by 41 paise from its previous close of 68.47 per greenback.
“Over the next week, we expect the India rupee to trade within a range of 68.40-69 levels on spot,” Anindya Banerjee, deputy vicepresident for Currency and Interest Rates with Kotak Securities, told IANS.
“The Indian rupee is being driven by crude oil prices, weakness in Chinese yuan due to the ongoing tariff war between US and China, outflows from domestic equity and debt market and a hawkish US Fed.”
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 2,455.44 crore rupees during the July 3-6 period.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors (FPIs) divested 2,737.04 crore rupees, or $398.62 million from the equities segment on stock exchanges during the week ended on July 6.
However, on technical charts, the underlying short-term trend of the National Stock Exchange’s (NSE) Nifty50 remains positive.
“Technically, with the Nifty bouncing back from the crucial supports of 10,550 points, the underlying short term trend remains up,” said Deepak Jasani, Head of Retail Research for HDFC Securities.