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Quarterly corporate results, trading activity by foreign investors and inflation data are the key factors expected to drive momentum in equity markets this week, analysts said.
Besides, markets will also focus on crude oil price developments amid geopolitical tensions, experts added.
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“In the coming week, the direction of the market will largely depend on corporate earnings, with major companies like Reliance Industries, Infosys, HDFC Bank, Axis Bank and HCL Technologies expected to report their results, among others” , Ajit Mishra, senior vice president of research. , Religare Broking Ltd, said.
On the macroeconomic front, investors will keep an eye on the CPI (consumer price index-based inflation) and WPI (wholesale price index-based inflation) data for September, which is expected to be announced Monday.
Investors will also closely follow updates on geopolitical tensions, particularly their impact on crude oil prices and foreign fund flows. Key national economic data, including CPI and WPI inflation, are also forecast, which could influence market sentiment, Mishra added.
Last week, the benchmark BSE index fell 307.09 points, or 0.37 percent, to close at 81,381.36, while NSE Nifty slipped 50.35 points, or 0.20 to cent, to settle at 24,964.25.
Markets ended the week slightly lower, pausing after a sharp decline. The week started on a pessimistic note due to continued selling pressure from foreign investors, but selective strength in heavy stocks helped limit losses in later sessions, he said.
Additionally, the markets will also witness the opening of three initial public offerings (IPOs), one in the motherboard segment and two in the SME segment.
The initial sale of Hyundai Motor India shares is expected to hit the markets on Tuesday and will conclude on Thursday, as the automaker plans to raise Rs 27,870 crore, through an offer for sale.
Lakshya Powertech and Freshara Agro Exports from the SME segment will also open their IPOs next week, on October 16 and 17, respectively.
“The Indian market is currently in a consolidation phase due to premium valuations and a gloomy outlook for second quarter results.
“Foreign institutional investors (FIIs) are capitalizing on arbitrage opportunities in Chinese markets, driven by stimulus measures and low valuations. The RBI policy was neutral, as the change in position does not indicate the likelihood of a fall in short-term rates,” Vinod Nair, head of research at Geojit Financial Services, said.
Foreign investors turned net sellers in October, withdrawing stocks worth Rs 58,711 crore in the month so far due to the escalating conflict between Israel and Iran, rising sharply crude oil prices and the strong performance of the Chinese market.
The recent rise in the 10-year US Treasury yield, driven by an unexpected rise in underlying inflation and lingering geopolitical challenges, has prompted FIIs to shift to more affordable markets. This trend is expected to affect the performance of equity assets in the near term, Nair said.
According to Siddharth Khemka, head of wealth management research at Motilal Oswal Financial Services Ltd, on the economic calendar front, India, China and the UK will announce their inflation numbers.
Interest rate decisions from the European Central Bank (ECB), Chinese GDP and U.S. retail sales will also be key events to watch, Khemka said.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First publication: October 13, 2024 | 4:40 p.m. STI