Week Ahead:- Experts predict a positive first week for the new financial year FY25, with focus on auto sales data, manufacturing & services PMI numbers, RBI interest rate decision, and March FY24 quarter earnings.
The market closed strong on March 28, with benchmark indices increasing by 1%, with most sectors participating except for IT. The monthly expiry session for March derivative contracts showed a good rally, suggesting a potential record high.
The first week ahead of FY25 is expected to be positive, with focus on auto sales data, manufacturing & services PMI numbers, RBI interest rate decision, and March FY24 quarter earnings. The Nifty 50 and BSE Sensex also saw gains.
Key factors for upcoming week
Auto Sales
The new financial year FY25 will begin with auto sales data for March, focusing on auto stocks like Maruti Suzuki India, Tata Motors, Hero MotoCorp, Eicher Motors, Ashok Leyland, Bajaj Auto, Mahindra & Mahindra, and TVS Motor Company. Brokers anticipate double-digit growth in retail two-wheeler sales and a single-digit increase in passenger vehicle sales.
RBI Policy
The Monetary Policy Committee’s three-day meeting on April 5 will determine the interest rate decision, with economists predicting no change on April 5. Any future interest rate cuts will depend on US Federal Reserve action. In February, CPI inflation eased to 5.09%, and core inflation dropped to 3.3%. The RBI Policy remains closely monitored.
Domestic front
On the domestic front, market participants are awaiting HSBC Manufacturing PMI data for March and Services PMI numbers due on April 4. India’s flash manufacturing Purchasing Managers’ Index (PMI) reached its highest since February 2008, while flash services PMI dropped. Bank loan and deposit growth numbers and foreign exchange reserves will be released on April 5.
Powell Speech
Powell, the Federal Reserve Chair, is set to deliver a speech on April 3, focusing on the Fed’s stance on rate cuts. In a recent speech in San Francisco, Powell emphasized the Fed’s desire for inflation to consistently reach their 2% target. Investors are anticipating the first rate cut in June 2024.
Global factors
Participants will track manufacturing and services PMI final data from US and China, unemployment rate, non-farm payrolls, JOLT job openings & quits, and US factory orders.
Crude Movement
Brent crude futures reached their highest closing level since October 2023, rising 2.64 percent in March 2024 to $87.07 a barrel. India, the net oil importer, is at risk of consistent price increases. Crude prices have rallied for the third consecutive month, rising 6.3% in March and 13% in the March 2024 quarter.
This surge is attributed to OPEC+ output cuts and market anticipation of lower interest rates. Additionally, Russia’s compliance with OPEC production pledges may further stimulate price increases in the crude oil market.
Grey Market IPO ahead
Bharti Hexacom is set to launch its Rs 4,275-crore public issue for three-day subscription on April 3, with a price band of Rs 542-570 per share. The SME segment will not see a new IPO launch. Seven companies, including Radiowalla Network, TAC Infosec, Yash Optics & Lens, Jay Kailash Namkeen, K2 Infragen, Aluwind Architectural, and Creative Graphics Solutions India, will close their initial public offerings next week. Nine SME companies will debut on the bourses.
Technical levels
In recent trading, the Nifty 50 has rebounded 22,300 points, with above-average volumes and significant moving averages. Experts anticipate a record high of 22,526 next week, with immediate support around 22,200 and important support at the 22,000 level. The market is experiencing severe volatility at its all-time high of roughly 22,500 levels, but there are signs that the Nifty may find support from the lows and rise further. The next upside targets are 22,550-22,650 over the next week, with immediate support around 22,200-22,100.
FNO data
The Nifty 50 may face resistance at 22,500-22,600 levels in the new series, with support at 22,200 and 22,000 levels. The maximum open interest on the call side was at 22,600, followed by 22,300, and 22,500 strikes, while the maximum open interest on the put side was at 22,300. The India VIX rebounded with a 5% uptrend, closing the week at 12.83.
Corporate events
In the first week of the 2024-25 fiscal, shares of TVS Holdings, Varun Beverages, Bharat Dynamics, Ashok Leyland, and others will trade ex-dividend, ex-bonus, and ex-split, with some declaring buybacks.