Israel-Iran Conflict, Q4 Results Among 11 Factors Driving D-Street This Week
Commenting on last week’s action, Santosh Meena, head of research at Swastika Investmart, said Nifty gave up most of its gains on Friday due to US inflation concerns, geopolitical tensions and selling by foreign institutional investors (FIIs).
The coming week will see the best action, with the earnings season kicking off with the earnings release of Tata Consultancy Services (TCS) and the Iran-Israel conflict taking center stage, Meena said. He said movements in oil prices, Chinese GDP data, US retail sales figures, US bond yields and the dollar index (DXY) will be important macroeconomic events that could influence market sentiment.
Indian markets will be closed on Wednesday, April 17 due to the Ram Navami holiday.
Here are the factors likely to influence movement when markets reopen this week:
1) General election
Voting begins in the 18th Lok Sabha on Friday, April 19. In this poll, 102 constituencies in 21 states and Union Territories will vote to elect members of the National Assembly.
2) 4th quarter performance
“India’s earnings season began on Friday with TCS’ quarterly earnings release. This week, 62 BSE listed companies are expected to announce their January-March quarter results and the Street will be keeping an eye on the numbers. Among them, Bajaj Auto, HDFC Life Insurance Company, Wipro and Jio Financial Services are widely tracked.
3) Iran-Israel conflict
Iran launched an explosive drone and fired missiles toward Israel late Saturday, launching its first direct attack on Israeli territory. It was a retaliatory attack that raises the threat of a wider regional conflict as the United States pledges ironclad support for Israel.
A significant escalation in tensions in both Indian and global markets could lead to panic selling and increased volatility. The market will also closely monitor movements in crude oil prices, which are influenced by geopolitical events.
4) US market
U.S. stocks fell on Friday amid a mixed start to the earnings reporting season, while concerns about a possible escalation in tensions in the Middle East rattled financial markets. The Dow 30 fell 475.84 points, or 1.24%, to 37,983.20, while the S&P 500 fell 75.65 points, or 1.46%, to 5,123.41. Meanwhile, the Nasdaq Composite Index rose more than 267.10 points, or 1.62%, to close at 16,175.10 on Friday.
When Indian markets reopen on Monday, they will take note of the US market’s close on Friday. We will also track the movement of GIFT Nifty futures on Monday. The latter is an early indicator of the movement of Nifty50.
5) Rupee vs Dollar
The rupee closed at 83.38 against the US dollar on Friday due to massive selling in domestic stocks and dollar strength on major foreign exchanges. Forex traders said rising crude oil prices had dampened investor sentiment. In the interbank foreign exchange market, the local unit opened at 83.36 and hit an intraday low of 83.44 against the dollar. The local unit finally settled at 83.38, recording a loss of 7 paise compared to the previous close.
“USD/INR rose as high as 83.41 after the US data despite RBI selling and closed below 83.20 on Wednesday. FPIs were the main buyers of the FPI pair until Wednesday as risk aversion replaced risk over sentiment,” he said. Representative Anil Kumar Bhansali said. said Treasury and Managing Director at Finrex Treasury Advisors LLP.
“The rupee will get support only if the RBI sells the dollar and protects it. Otherwise, the next week’s range will be 83.30-83.60 and there is an upside risk,” Bhansali said, short-selling to exporters and importers. said, recommending buying good dips. Stop at 83.50.
6) Corporate action
Monday, April 15th will be the ex-rights and record date for the Sakuma export rights issuance. April 18 is the ex-date and record date for the sub-segments of Suratwala Business Group. April 19 is Schaeffler India India ex-dividend date. The record date is April 20th.
7) Technical factors
Arvinder Singh Nanda, senior vice president at Master Capital Services, said that despite Friday’s fiasco, India’s benchmark indexes showed mainly positive trends throughout the week, registering gains for the fourth consecutive week.
This week on Nifty, prices have seen mainly sideways movement with resistance range identified at 22,750-22,800 and support identified at 22,520 and a break above 22,750 may trigger a bounce towards 23,000 in the near future, Nanda said.
For Bank Nifty, the index maintained a consolidation phase especially near 49,000 and the index is now finding immediate support at 48,300. At the same time, the Master Capital analyst added that resistance persists at 49,000 and any substantial move beyond this boundary is likely to trigger a significant reversal in the market.
His advice to investors is to adopt a strategy of buying on the downside and selling on the rise with appropriate stop loss measures.
8) FII/DII measures
Foreign institutional investors (FIIs) were net sellers of Indian equities and equities worth Rs 8,027 crore on Friday, while domestic institutional investors (DIIs) were also net buyers worth Rs 6,341.53 crore.
The performance of domestic and foreign investors will affect the movements of the domestic stock market.
9) IPO action
In the SME segment, two IPOs – Ramdevbaba Solvent and Grill Splendor Services – are open for subscription. Apart from these two new issues, Dalal Street also sees two listings: Teerth Gopicon and DGC Cables and Wires.
10) Crude oil
Oil prices rose about 1% on Friday as geopolitical tensions in the Middle East outweighed the International Energy Agency’s (IEA) forecast for weak global oil demand growth and reduced expectations of a U.S. interest rate cut this year.
May Brent crude futures were trading at $90.19 per barrel, up $0.410, or 0.46%. The more actively traded June contract closed up $0.51 at $85.45 a barrel, while the May contract expires on Friday.
On MCX, the April crude oil contract settled at Rs 7,190, up Rs 3,0.04 per cent. Oil prices are very important for Indian macro and inflation.
11) Bond yield
Indian government bond yields surged on Friday, the benchmark yield’s biggest daily rise in six months and tracking US yields after rising inflation, reaffirming doubts about a rate cut in the near future. The benchmark Indian 10-year yield closed at 7.1794%, the highest since January 24, following 7.1112% the previous time.
Yields recorded their biggest rise in a single session since Oct. 6, when the central bank said it would use open market bond sales to manage liquidity. Yields rose 6 basis points this week, following a 7 basis point rise in the first week of the fiscal year.
“The third straight hot inflation in the U.S. has completely shaken expectations for both the scope and timing of rate cuts in 2024,” said Madhavi Arora, chief economist at Emkay. global.
Institutional opinion
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of The Economic Times.)
