The Nifty formed a hammer kind of pattern on the weekly candlestick charts. HDFC Securities said the pattern is indicating that the market is unlikely to witness any sharp upmove from here on
The upcoming earnings season, crude and rupee movements, and technical factors are likely to play a key role in the market this week. Besides these, investors may also bet on earnings-related reactions from the past week. Hindustan Unilever (HUL) posted its September quarter numbers after market hours on Friday.
After the drubbing seen on Thursday, where indices lost over 2 percent in a single session, equity benchmarks reversed almost all of their losses and ended the week on a strong note. The Sensex ended last week over 700 points higher and the Nifty closed above the 10,450-mark.
Investor wealth soared by Rs 2.98 lakh crore. In fact, the Sensex posted its biggest single-day gain in 19 months on Friday, soaring 732.43 points to close at 34,733.58. Led by the surge in stocks, the market capitalisation of BSE-listed companies rose Rs 2,98,411.33 crore to Rs 1,38,68,813.92 crore.
For the week-ended October 12, the Sensex and the Nifty gained 1-1.5 percent. Meanwhile, the BSE 500, mid- and smallcap indices rose between a percent and 3 percent each.
“Markets are extremely volatile these days, but indications are in favour of further rebound in the Nifty. We advise focusing on earnings, global markets and currency movement for further cues. Traders should hedged trades in such a scenario and maintain extra caution while selecting stocks,” Jayant Manglink, President, Religare Broking, said.
Here’s a look at 10 events that are likely to impact the market this weekOver 70 companies to declare September quarter earnings
Earnings season has begun with the likes of Tata Consultancy Services (TCS) and Bandhan Bank declaring their results for the September quarter. This week, 71 companies will declare their results. Prominent among them are HDFC Bank, Reliance Industries, Delta Corp, Indiabulls Housing Finance, IndusInd Bank, Monnet Ispat, Network18, Hero MotoCorp, Infosys, ACC, DCB Bank, Mindtree, ICICI Securities and UltraTech Cement.
HUL Q2 earnings
Investors are likely to react to the September quarter earnings declared by HUL. The FMCG major reported a 19.5 percent year-on-year growth in standalone profit to Rs 1,525 crore, driven by strong volume growth of 10 percent and operational performance. Experts see the stock reacting in the backdrop of some weakness in the consumption segment and worries on its valuations.Reaction to macro data
The Street is likely to react to key macro data released by the government on October 12. While factory output for August came in at a 3-month low of 4.3 percent, retail inflation inched up to 3.77 percent in September. Investors will take cues from these mixed trends as well.
Industrial production grew 4.3 percent in August as against 6.6 percent in July, data released by the Central Statistics Office showed. Meanwhile, retail inflation measured by the Consumer Price Index (CPI) grew 3.77 percent in September from 3.69 percent in August, driven by higher food and fuel prices and a weakening rupee. CPI is the main price gauge that the Reserve Bank of India (RBI) tracks.Corporate action
With financial results taking centre stage, corporate-related developments are likely to be far and few. This week a couple of companies are likely to be in focus.
Sagar Soya Products has called for an extraordinary general meeting (EGM) to discuss reduction in the equity share capital against corresponding accumulated losses. It also seeks alteration in the memorandum of association.
Indian Energy Exchange is likely to be in focus as the company goes ex-split in the ratio of 1:10 from October 19.Rupee
The trajectory of the Indian rupee will be closely tracked by the market. On October 11, the currency managed to hit a fresh low of Rs 74.48 per dollar. Going forward, any negative moves on the back of a strengthening dollar or rising crude is likely to strain the rupee as well.
Brent crude has seen a big fall last week, falling almost 4 percent. A global rout in equities along with lesser-than-expected impact of Hurricane Michael resulted in it shedding all its premium that was built in the past few sessions.
This has been one of the reasons behind the market’s upmove in the week gone by. Going forward, investors will continue to monitor movements related to crude, with prices now cooling around $80 per barrel.
On the global front, investors will watch out for Chinese inflation data, US industrial production, cues from the minutes of Federal Reserve’s FOMC meet in September, Japanese inflation and Chinese GDP data.Technical factors
The Nifty formed a hammer kind of pattern on the weekly candlestick charts.
HDFC Securities said the pattern is indicating that the market is unlikely to witness any sharp upmove from here on. "The overhead resistance of 10,600 is going to be crucial for the Nifty as there is a possibility of downward reversal in the next 1-2 weeks. If that occurs, the index is expected to revisit the recent swing low of 10,139 in the next few weeks,” the report stated.FII flowsFund flows from foreign institutional investors (FIIs) have been in the negative zone, making it one of the reasons for the selloff that the market has seen in the past month or so. So far, FIIs have sold over Rs 17,850 crore worth of shares, while domestic institutional investors (DIIs) have been net buyers at Rs 15,500 crore. For September too, DIIs bought over Rs 12,504 crore worth of shares, while FIIs sold shares worth Rs 9,468 crore.
FII trends, so far, reflect a selling momentum, especially in a tightening interest rate scenario as well as strengthening US economy and dollar.
Stocks in News
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Nalco: The Board has approved share buyback worth Rs 504.8 crore.(With inputs from PTI)