Indices ended the week in the green owing to a recovery in the global markets as even after the US CPI came in at a 41-year high, some of the policymakers preach for a 75 basis point rate hike in the next July Fed meet.
During the week gone by, BSE Sensex lost 721.06 points (1.32 per cent) to close at 53,760.78, while the Nifty50 declined 171.4 points (1.05 per cent) to end at 16,049.2. On the sectoral front, BSE Power index added 4.5 per cent and BSE Oil & Gas, Auto, and Realty indices rose two percent each. However, the Information Technology index shed six per cent.
Among broader indices – BSE Small-cap index rose 0.5 per cent, Mid-cap added 1 per cent, while Large-cap index shed 0.5 per cent.
“Volatility has re-emerged and investors have turned their focus on upcoming Fed policy in the backdrop of heightened US inflation. Fall in crude prices and reduction in FII selling added optimism to the domestic market while gloomy IT results, depreciating rupee and fear of global recession are restricting sizeable up move,” said Vinod Nair, Head of Research at Geojit Financial Services.
Factors to Watch Out For
Rupee
Indian rupee continued to depreciate against the US dollar and closed near the 80 mark as the foreign investor continue the selling in the Indian markets. During the last week, the rupee touched a fresh low of 79.96 per dollar and declined 62 paise to end at 79.87 per dollar on July 15 against its July 8 closing of 79.25.
“As dollar index traded in a range broadly the trend for dollar is positive till the time it is above 105, next hurdle for dollar can be seen around 110 hence rupee can be seen weak trend continued towards 80.50,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
“79.25 will act as resistance for rupee and break above 79.25 will trigger short covering for rupee. Rupee range can be seen between 79.50-80.50 for the coming week,” he added.
FII Selling
Foreign institutional investors (FIIs) continued their selling spree in the last week also but with reduced rate, however domestic institutional investors (DIIs) provided some support as they remain net buyers.
ECB Meeting
The European Central Bank (ECB) policy meeting is scheduled next week, which is expected to address inflation and other Eurozone crisis.
Suggesting stock market observers and investors to remain vigilant against the ECB meeting, Divam Sharma, Founder at Green Portfolio said, “Eurozone inflation numbers are anticipated in the coming week, with the Euro reaching a parity of 1:1 with the US Dollar for the first time in two decades, and the Nord Stream 1 pipeline being closed for maintenance, the energy costs for the continent might continue to soar, especially post the shutdown of key plants in the US which were large exporters to Europe. Focus on renewable energy will increase multifold.”
Q1 Results
Q1FY23 earning season began with the announcement of IT sectors, worsening global macros in terms of rising inflation, economic slowdown, currency headwinds, and likely to cut spending revenue growth taper down to low double-digit growth in FY24E.
Nearly 200 companies will announce their quarterly earnings next week including Ambuja Cements, Reliance Industries, HDFC Life Insurance Company, Hindustan Unilever, Havells India, IndusInd Bank, Wipro, CSB Bank, IDBI Bank, JSW Energy, RBL Bank, Bandhan Bank, JSW Steel, Ultratech Cement, ICICI Bank, Kotak Mahindra Bank.
Bank Of Maharashtra, AU Small Finance Bank, TV18 Broadcast, Network18 Media & Investments, Rallis India, Century Plyboards, Gland Pharma, Mastek, Tata Communications, CSB Bank, Hindustan Zinc, IDBI Bank, Mphasis, Persistent Systems, PVR, SRF, Crompton Greaves Consumer Electricals, Karnataka Bank, Uttam Galva Steels will also declare their June quarter earnings.
Nifty Technical Outlook
As per experts, technically minor support on the downside for the nifty 50 index lies at 15,850 levels, whereas minor resistance on the upside is capped around 16,150-16,200 levels. If the nifty 50 index breaches minor support on the downside and closes below it, there may be seen fresh break down and the index can drag towards major support on the lower side around 15,600, and if breaches minor resistance on the upside and closes above it, there may be seen fresh breakout and index can head towards higher levels around 16,350. Currently, nifty 50 index is trading below 200 days exponential moving average and suggests long-term trend is bearish. EquityPandit’s analyst predicts range for the week is seen from 15,650 on downside and 16300 on upside.
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