Moneycontrol
Last Updated : Nov 11, 2018 09:10 AM IST | Source: Moneycontrol.com

Earnings, crude & rupee moves among 10 factors that will chart market direction this week

Corporate earnings will be in focus this week as over 2,350 companies listed on the BSE will be declaring their earnings

Uttaresh Venkateshwaran @UttareshV

Earnings, crude oil price movement and rupee’s trajectory will be among the key factors that will drive market direction this week.

Over 2,300 companies on the BSE that will be declaring their earnings for the September quarter. Along with it, drop in crude oil prices along with rupee’s strength will be keenly watched by investors ahead.

Last week, equity markets put up a subdued performance, with the Sensex and Nifty gaining around 0.4 percent. On Friday, the market closed a rangebound session on a sombre note, but there was some outperformance by midcaps.

"Early earnings releases this week will dictate market trend in the following days along with rupee movement against the dollar and crude price movement. On the economic front, India's industrial production data for September and all-India general Consumer Price Index (CPI) inflation for October will be declared on Monday. While inflation data based on Wholesale Price Index (WPI) for October will be announced on Wednesday," Ketan Ranga, Senior Research Analyst at Equity99, said in a statement.

Here’s a look at 10 factors that could move the market this week.

Over 2,350 BSE companies to declare Q2 earnings

Corporate earnings will be in focus this week as over 2,350 companies listed on the BSE will be declaring their earnings.

Among the key ones to watch out are: Apex Frozen Foods, Aster DM Healthcare, Aurobindo Pharma, Bank of India, Britannia Industries, Coal India, Eicher Motors, Godrej Industries, Hathway Cable, Jet Airways, UCO Bank, Apollo Tyres, Ashok Leyland, Corporation Bank, Gati, Lemon Tree Hotels, Mahanagar Gas, NMDC, Novartis, Sun Pharmaceutical Industries, Tata Steel, CESC, Cox & Kings, Future Retail, GTPL Hathway, Housing Development & Infrastructure, IDBI Bank, Indian Hotels, JK Lakshmi Cement, Mahindra & Mahindra, Max Financial, Mahanagar Telephone Nigam, Prabhat Dairy, Rain Industries, Siemens, Videocon and United Breweries.

Titan result reaction

Investors will react to the Q2 result declared by Titan Company. The company after market hours on November 9 reported a 2.9 percent year-on-year growth in net profit at Rs 314.4 crore.

Revenue grew 26 percent at Rs 4,406.8 crore. Operating profit grew 5 percent at Rs 467.1 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) margin, however, fell to 10.6 percent as against 12.7 percent.

Jewellery and watches revenue grew 28.5 percent to Rs 3,582.1 crore and 17 percent to Rs 675.7 crore, respectively. Eyewear revenue grew 19 percent to Rs 120 crore.

Macro data

The key macro data points for D-Street include CPI for October, industrial production for September, as well as manufacturing output data for September on November 12.

WPI data for October will also be declared on November 14. Inflation data becomes key for the market as it could gauge Reserve Bank of India’s (RBI) stance and possible action on the interest rate front.

Trade war cues

Trade war concerns between the US and China have dominated cues for the market for a greater part of this year. While both Beijing and Washington DC have attempted to hold talks, the results have largely been negative, which has led to a lot of nervousness among investors.

However, there are signs of likely talks between the two nations to resolve the trade war issue.

Asserting that US-China bilateral trade is 'critical to the world economy', a top Chinese diplomat said Beijing has kept its door open for trade talks with the Trump administration, as the two top global economies are locked in a trade war.

Addressing a joint press conference on November 9, Chinese State Councillor Yang Jiechi said, "According to the US-China Business Council, trade and economic relations with China help every American family save $850 annually and creates as many as six million jobs in this country."

Global cues

Apart from developments around US and China’s trade war, investors will watch out for global macro data points as well as earnings reactions. UK will be announcing its unemployment and inflation data, Japan gross domestic product (GDP), oil inventory data, among others will be other focus points.

Crude oil

Crude oil prices have crashed around 20 percent since the beginning of October, registering a possible fresh bearish base for the commodity. Global growth concerns have weighed on global equity markets and kept oil prices under check.

Oil prices fell to multi-month lows on November 9 as global supply increased and investors worried about the impact of lower economic growth and trade disputes on fuel demand.

Benchmark Brent crude fell below $70 a barrel for the first time since early April, down over 18 percent after touching a four-year high at the beginning of October.

Any negative move for oil could bode well for India as its import bill gets reduced. This will also have a positive impact on oil marketing companies (OMCs) among others.

Rupee

The Indian rupee is likely to be in focus as well. The currency on November 9 jumped around 50 paise to close around Rs 72.92 to the dollar. The currency strengthened on the back of falling crude oil prices. Bond yields, too, took a hit, which helped banking stocks as well.

Between October 1 and November 9, the currency has appreciated 0.35 percent.

Going forward, a stronger rupee could also help the market ahead. However, experts continue to be cautious ahead of crucial state elections lined up over the next one month.

Technical factors

Last week, the Nifty consolidated in a narrow range of 142 points and formed a Hanging Man kind of formation on the weekly scale.

“This kind of narrow ranges may eventually lead to a spurt in either directions,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

Technical experts such as Shabbir Kayyumi of Narnolia Financial Advisors believe that the Parabolic SAR remains in sell mode and suggests buying only if prices cross its SAR level, which is currently around 10,825 levels. Medium-term bullishness should be considered only above this level.

For the uninitiated, parabolic SAR is a technical indicator used to determine the price direction of an asset as well as draw attention to when the price direction is changing, according to investor education portal, Investopedia.

“Options data indicates an immediate trading range between 10,700 and 10,450 levels. Bulls should turn cautious if the Nifty falls below 10,450, followed by 10,380 levels," Kayyumi said.

FII flows

Investors will keep an eye on inflows through foreign institutional investors (FIIs). In November so far, FIIs have remained net sellers to the tune of Rs 39.11 crore.

Meanwhile, domestic investors have been net buyers to the tune of Rs 39.57 crore. Domestic investor interest is back in focus, with flows into mutual funds showing an improvement in October. Systematic investment plans (SIPs) have remained constant at around Rs 7,000 crore.

Stocks in news

Titan Q2: Net profit grew 2.9 percent YoY to Rs 314.4 crore; operating margin falls to 10.6 percent

Reliance Communications settles case of alleged failure to inform exchanges on interest payment default on debentures

NHPC's board will consider a share buyback proposal next week

Jet Airways: Vikram Singh Mehta has resigned as independent director

Syndicate Bank: The lender raised MCLR by up to 0.15 percent.

BGR Energy Systems' net profit jumped over 5-fold to Rs 6.19 crore

IEX's net profit jumps 30 percent in September quarter

Tata Motors: JLR October sales down 4.6 percent at 44,282 units

Sobha Developers' Q2 profit jumps 22 percent to Rs 61.4 crore

Wipro: The company-owned Appirio expands operations in Portugal.

IndiGo: DGCA directs IndiGo and GoAir to address issues with respect to 15 P&W engines

IOB: The lender has hiked its benchmark lending rate by 0.05 percent
First Published on Nov 11, 2018 09:09 am
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