Moneycontrol
May 14, 2017 11:56 AM IST | Source: Moneycontrol.com

Top 12 factors which are likely to chart direction of market this week

Macro data, quarterly earnings results from major companies such as Bajaj Auto, SBI, HUL, & PNB will set the trend for the market this coming week.

Top 12 factors which are likely to chart direction of market this week

Uttaresh Venkateshwaran

Moneycontrol News

Barring the last session in which investors preferred to book profits, the market had a stellar performance through the week. The Nifty50 held on to its crucial support level of 9,400 and closed 1.24 percent higher for the week ended 12 May.

Both Sensex and Nifty50 managed to reclaim lost glory by climbing mount 30,000 and 9,400 respectively. The rally was largely on the back of a better than expected monsoon forecast from the IMD and a recovery in earnings momentum.

Market participants booked profits on the last day of the week ahead of key macroeconomic data. The IIP and WPI figures were released post market hours on Friday.

With a slew of earnings lined up, the market next week will largely look for cues from them and that could set the course going forward, suggest experts.

"In the near-term, we feel that next three weeks will be very important since large set of results are stated to report,” Vinod Nair, Head of Research, Geojit Financial Services said in a statement.

“The market is very eagerly waiting to understand the trajectory of earnings outlook for FY18. This is because market is currently expecting 20 percent earnings growth for FY18 compared to muted FY17," he said.

Moneycontrol lists out 12 factors that could move the Street this coming week:

341 companies due to report Q4 results this week:

Major companies are expected to report their results for the quarter ended March. The list includes names like Bata India, Colgate-Palmolive (India), Punjab National Bank, Shree Cement, Tata Steel, Hindustan Unilever, JSW Steel, Bajaj Auto, Bank of Baroda, State Bank of India and Tata Power.

PNB will report its results on May 16 while India’s largest public sector bank, State Bank of India will report results for the quarter ended March 31 on 19 May.

Tata Steel will report its results for Q4Fy17 on 16 May, followed by HUL which will report results on May 17, and Tata Power on 19 May.

IIP Data, WPI Inflation Data:

The Street is likely to react to the macro set of numbers released by the government post market hours on Friday. India’s industrial output grew at a robust 2.7 percent in March from 1.9 percent in February, mainly due to a revision in the base year to 2011-12, replacing the current base of 2004-05.

Meanwhile, inflation based on the wholesale inflation slipped to 3.85 percent during April as compared to 5.3 percent in March, mainly due to decline in prices in primary articles.

Trade Data on Monday:

On the macroeconomic data, the government will announce India's trade data for the month of April 2017 on Monday. A surge in gold imports in March widened the trade deficit to a four-month high of $10.4 billion as against $4.4 billion in March 2016.

Idea’s Q4 net loss narrows to Rs 327.7

Telecom major Idea Cellular’s net loss for March quarter beat the Street expectations on the back of big gains in the bottom line. The company’s Q4 net loss came at Rs 327.7 crore, much lower than a poll of analysts by CNBC-TV18, which pegged the loss at Rs 765 crore.

Its revenues were reported at Rs 8126.1 crore, which came in line with the poll estimates of Rs 8,135 crore. The earnings before interest, taxes, depreciation and amortisation (EBITDA) was reported at Rs 2,196 crore. The EBITDA margin was reported at 27 percent.

Pharma companies in focus:

Pharma companies will remain in focus after NPPA or the National Pharmaceutical Pricing Authority, India's drugs pricing watchdog, on Saturday has issued a memorandum to monitor prices of 19 medical devices sold.

The move comes at the back of NPPA's decision in February to slash prices of coronary stents by up to 85 percent, Moneycontrol.com reported.

Under the monitoring list, reviewed by Moneycontrol, the government has included catheters, heart valves, orthopedic implants, internal prosthetic replacements, intraocular lenses, disposable hypodermic needles, bone cement, among others.

No mass layoffs by Indian IT companies: Nasscom

IT companies will be in focus after Industry body Nasscom on Friday sought to allay fears of mass layoffs in the Indian IT sector and claimed the industry continues to be a "net hirer" with over 1.5 lakh people being employed on net basis every year, said a report.

"Skilling and workforce realignment are essential to remain competitive in international markets. It needs to be appreciated that such workforce realignment is a normal part of the internal process of companies based on their own operational imperatives," Nasscom said in a statement.

"It pointed out that no significant changes have been reported or observed this year. Such reports are incorrect. In fact, the industry continues to be a net hirer with over 1.5 lakh people being employed on a net basis each year, though the focus is shifting from scale to skill," it said.

Stocks in focus

Power Grid: Power Grid recently approved raising of Rs 5,000 crore through Masala Bonds and gave a nod to investing Rs 459 crore in 3 projects.

JSW Energy: JSW Energy could be on investors’ radar after it extended the deadline to JP Power deal to December

PSP Projects IPO to hit D-Street this week:

Market participants will look forward to a new entrant in the IPO market. PSP Projects, a company offering a construction and allied services

The Ahmedabad- firm's initial public offer (IPO) aims to raise Rs 211 crore and will open on May 17 with a price band of Rs 205-210. The issue, which closes on May 19, includes a fresh issue of up to 72 lakh equity shares and an offer for sale of up to 28.8 equity shares.

Global Cues

There could be some hints that the market could take on the global front. Japan is all set to announce its GDP numbers next week, along with the industrial production data. Europe, too, will announce its GDP data.

The United States and China will be announcing their industrial production figures that could give a hint of the state of the economies there. Metal prices have been reacting to the economic conditions in China.

Technical Outlook:

On the technical front, the Nifty registered another record high of 9,450.65 in the week gone by but witnessed some profit booking decline towards 9,400 on Friday.

It looks like Nifty is following a particular pattern i.e., a sharp up move followed by some consolidation in a small range and then once again a breakout from the range to resume the uptrend.

Investors should not get too much worried about small dips, instead, they should use dips to buy into quality stocks. There could be a possibility that markets consolidate in the coming week as Nifty50 s trading near key resistance levels of 9450-9500.

“The Nifty’s sharp up move was followed by some consolidation and then we saw a breakout again. We witnessed this last week and as a result we see a formation of ‘Bullish Flag’ pattern on daily chart. The potential target of this pattern comes to yet another milestone of 9600,” Vijay Singhania, Founder-Director, Trade Smart Online told Moneycontrol.com.

“We expect Nifty50 to continue this northward rally towards 9,600, where we would advise traders to start taking some money off the table,” he said. For the forthcoming week, the support would now be seen at 9372 – 9340.

Corporate Action Meter:  

Libord Finance: May 15

A meeting of board of directors will be held on 15 May to discuss the issue of equity shares on preferential basis to the extent of Rs 4 crore. Also, to commend adoption of new Articles of Association of the company.

Libroad Securities: May 15

This is to inform you that a meeting of the Board of Directors of Libord Securities Limited is scheduled to be held on Monday, 15th May to consider inter alia fixing up the date of the 23rd AGM of the Company and the Book closure date, commend adoption of new Articles of Association of the Company pursuant to the provisions of the Companies Act, 2013.

Can Fin Homes: May 15

The Board of Directors of the Company is scheduled to be held on Monday May 15, 2017, in Bengaluru to consider raising funds by way of issue of Secured Redeemable Non-Convertible Debentures on Private placement basis in terms of Section 42 of the Companies Act, 2013 and related rules and for acceptance of deposits from public in terms of Section 76 of Companies Act, 2013.

Surya India: May 15

The Board of Directors of the Company is scheduled to be held on Monday, 15th May 2017 to consider and approve Voluntarily Surrender of Certificate of Registration of Non-Banking Finance Company.

FII and DII Activity:

The activity of foreign institutional investors (FIIs) and domestic institutional investors (DIIs) will set the tone for markets. FIIs turned net buyers in Indian equities for the week ended 12 May, according to provisional figures while DIIS turned net sellers in the same period.

“With indications of above normal rainfall, coupled with renewed interest from foreign portfolio investors (FPIs) into domestic equities during the week kept the market spirits high and propelled benchmark indices to unchartered territories,” said Singhania of Trade Smart Online.

“Last week, FPIs bought stocks worth a net Rs 2,135.10 crore from secondary equity markets in four trading sessions from May 8 to 11 on the back of domestic and global cues,” he said.

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