Dalal Street – Q2 Results, China GDP , crude oil prices among all other factors to haunt Dalal Street investors in this week.
The market recovered well and gained 0.5 percent in consolidation for the week ending October 13. Higher-than-expected US inflation, geopolitical worries, and IT companies’ lowered revenue guidance were countered by positive September quarter profit expectations, CPI inflation falling, and solid industrial production.
Experts expect the market to remain rangebound with a positive bias due to healthy corporate earnings expectations and economic data, while focusing on Fed Chair speech, Israel-Hamas conflict, China’s GDP numbers, and oil prices. Results season will cause stock-specific action.
The Nifty50 increased about 100 points to 19,751, the BSE Sensex 287 points to 66,283, while the Nifty Midcap 100 and Smallcap 100 each gained around half a percent.
Most sectors, save technology and PSU banks, concluded in green, with Realty and Auto leading with 4% and 3% gains.
Next week’s top 10 factors
Israel-Hamas War
In addition to corporate profits, market investors will watch the October 7 Israel-Hamas war. Israel launched thousands of airstrikes in Gaza on October 8 after Hamas militants killed more than 1,000 Israelis and foreigners, including Americans, during the Jewish holiday. On October 9, Yoav Gallant, Israel’s defense minister, ordered the complete siege of Gaza.
Israeli military warned about 1 million northern Gaza civilians to go to south Gaza before a major assault, worsening the battle. Over 3,500 died on both sides.
Q2 Results and RBI MPC MinutesÂ
Federal Bank, Bajaj Finance, CEAT, Tata Coffee, ICICI Prudential Life Insurance, Bajaj Auto, Mastek, IndusInd Bank, Wipro, Jio Financial Services, PVR Inox, Coforge, Hindustan Unilever, Metro Brands, Havells, ITC, Mphasis, Nestle, UltraTech Cement, Voltas, Paytm, JSW Steel, Hindustan Zinc, Cyient, and others will release their quarterly results this week.
The Reserve Bank of India’s Monetary Policy Committee (MPC) maintained the benchmark repo rate at 6.5 percent on October 6, as expected by D-Street. On October 19, the rate-setting panel will disclose its minutes, which will reveal how the economy affected MPC decisions.
Inflation Data based on WPI
September WPI-based inflation data is due on Monday, October 16. Government data showed India’s WPI at -0.52% in August for the seventh month in a row. India’s consumer price index (CPI)-based inflation fell drastically to 5.02 percent in September, returning to RBI’s tolerance band 2-6 percent after two months.
Global Economic Data
China’s Q3-2023 GDP statistics, which experts expect to fall from 6.3 percent, will be watched by market participants. Participants will also study China, US, and UK retail sales, European and Japanese inflation statistics, and September US industrial production to assess their economies.
Fed Chair Powell’s Speech
Fed officials’ speeches next week, including Fed Chair Jerome Powell’s on October 19, will also be key because they still want one more rate hike by 2023, implying higher rates for a longer time to battle inflation. In September, US consumer inflation was more than predicted at 3.7 percent, raising bond yields.
The 10-year US bond yields finished at 4.63 percent, down from 4.8 percent week-on-week but up from 4.26 percent month-on-month. The US dollar index rose to 106.67 on Friday from 106.04 week-on-week.
Domestic Economic Data
On October 16, India will reveal its September wholesale inflation estimates, which economists expect to rise to 0.7 percent from (-0.52) percent in August.
On October 20, bank loan and deposit growth for the fortnight ended October 6 and foreign exchange reserves for the week ended October 13 will be announced.
Quarterly corporate earnings
Market investors will closely monitor Q2 results season, which has high expectations for auto, finance, and oil & gas. Geojit Financial Services research head Vinod Nair remarked.
In the coming week, HDFC Bank, Bajaj Finance, Bajaj Auto, IndusInd Bank, Wipro, Hindustan Unilever, ITC, Nestle India, LTIMindtree, UltraTech Cement, JSW Steel, ICICI Bank, and Kotak Mahindra Bank will release their quarterly scorecards.
Next week, Jio Financial Services, Bandhan Bank, Federal Bank, IDBI Bank, RBL Bank, Yes Bank, Paytm, CEAT, Cyient DLM, ICICI Securities, Yatra Online, Happiest Minds, ICICI Prudential Life Insurance, ICICI Lombard General Insurance, L&T Technology, Syngene International, Tata Elxsi, Persistent Systems, Zee Entertainment Enterprises, Coforge, PVR Inox, Voltas, CSB Bank, JSW Energy, and L&T Finance Holdings will also
Corporate Action
Beginning Monday, October 16, shares of Tata Consultancy Services (TCS), HCL Technologies, Glenmark Life Sciences, and others will trade ex-dividend. Next week, few stocks will trade ex-split and ex-bonus.
Fii Flow
FIIs remained net sellers in India for the third month due to rising US bond yields. Experts expect selling to decrease in the next days, but if oil prices rise due to the Israel-Hamas war, more selling is possible.
Last week, FIIs sold Rs 2,200 crore worth of cash segment shares, bringing the current month outflow to Rs 10,600 crore. DIIs bought approximately Rs 8,400 crore worth of shares to balance this.
“FIIs may sell if Israel-Hamas confrontations escalate and crude prices rise. Geojit Financial Services Chief Investment Strategist V K Vijayakumar stated uncertainty is considerable.
Oil Prices
The Israel-Hamas conflict is one of the main reasons oil prices have risen in the past week. The war raised concerns that the escalation may affect Middle Eastern oil production (which accounts for one-third of global seaborne trade) and supplies, though the physical oil supply has not yet been affected.
Oil prices also rose when the US tightened penalties against Russian crude exports for violating the G-7 oil price agreement. Oil prices are expected to fluctuate because to geopolitical tensions, although experts do not expect other Middle Eastern nations, especially Iran, to directly participate in the battle.
Brent crude futures, the international oil benchmark, rose 7.5 percent to $90.89 a barrel this week, forming a weekly Bullish Harami pattern, a bullish reversal pattern. Therefore, market participants will closely monitor any rally, as oil importers like India worry about price spikes.
Technical View
After the Hammer pattern in the previous week, the Nifty50 formed a bullish candlestick pattern with a prominent upper shadow on the weekly scale, confirming a possible upward rally. On the daily charts, the index recovered smartly from day’s low and closed in red but above 20-day and 50-day EMAs. The weekly RSI (relative strength index) maintained above 60, indicating positive bias.
Thus, if the index sustains above the 20-day EMA (19,690) and gets support from leading sectors (banks and IT), 19,850, last week’s upper resistance, can be cleared in the coming week, with immediate support at 19,500 and crucial support at 19,300. Until then, it may remain in the 19,300-19,850 range. experts stated.
“If prices stay over 19,500, buy the dip is likely to remain in focus. A new high is likely if it closes above 19,900. A significant decline below 19,300 might push Nifty below 19,000-18,800 “Arvinder Singh Nanda, Senior Vice President at Master Capital Services, said.
Indian F&O Cues, VIX
According to Options data, 19,500 may be the support area in the following days, with resistance at 19,800-19,900, but 19,700 is predicted to be essential for a move either way.
According to weekly Options data, the maximum Call open interest was 19,800 strike, followed by 19,900 & 20,000 strike, with Call writing at 19,700 strike, then 19,900 & 19,800 strikes, and the maximum Put open interest was 19,700 strike, followed by 19,000 & 19,600 strikes, with Put writing at 19,700 strike, then 19,600 & 19,500 strikes.
India VIX rose 3% to 10.62 levels compared to last week, but the weekly range narrowed further. It formed a Doji candlestick pattern on Friday after a consistent downtrend in the previous three days, indicating the possibility of increased volatility in coming sessions with a hurdle at 12-13 levels.
IPO
IRM Energy, a Gujarat-based gas distribution company, will launch its Rs 545-crore IPO on October 18 and conclude on October 20 at Rs 480-505 per share.
Online retail firm WomanCart will launch its Rs 9.56 crore at Rs 86 per share on October 16-18, followed by Rajgor Castor Derivatives’ Rs 48-crore public issue on October 17 at Rs 47-50 per share. The promotion ends Oct. 20.
Arvind and Company Shipping Agencies’ IPO, 36.72 times subscribed, closes on October 16.
According to IPO timeline, Committed Cargo Care will debut on NSE Emerge on October 18.
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