Stock Market Outlook: US Federal Reserve FOMC, Q4 earnings, FII actions among 10 factors that will set the tone for D-Street this week
Stock market trading will be suspended on Wednesday, May 1, due to Maharashtra Day.
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).
Going forward, FII activity remains a key factor to watch, especially considering the already low stakes in the Indian market, he said.
Here are the factors likely to influence movement when markets reopen this week:
US Federal Reserve FOMC
The Federal Reserve’s interest rate committee is scheduled to begin a two-day meeting on Tuesday, April 30, with results expected on May 1, and the Federal Open Market Committee (FOMC) is expected to keep interest rates unchanged. The Street will be tracking the Fed’s comments on the timing of the rate cut, with a 25bps cut in policy expected in June.
4th quarter performance of 2024
More than 200 BSE-listed companies are expected to report their March quarter results this week, with Adani Enterprises, Adani Ports, Dabur India, Britannia Industries, Titan, Tata Technologies, Avenue Supermarts, Kotak Mahindra Bank and Can Fin following the results. It will most likely come from Homes. , Tata Chemicals, Trent, UCO Bank, UltraTech Cement, Adani Energy Solutions, Adani Total Gas, Adani Power, Ambuja Cements, Adani Wilmar.
The market will also react to earnings announcements by ICICI Bank, Yes Bank, RBL Bank, IDFC First Bank and others.
american market
U.S. stocks closed with strong gains on Friday. The Dow 30 rose 153.86 points, or 0.40%, to 38,239.70, while the S&P 500 rose 51.54 points, or 1.02%, to 5,099.96. Meanwhile, the Nasdaq Composite Index rose more than 316.14 points, or 2.03%, to close at 15,927.90 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.
rupee vs dollar
The Indian rupee closed little changed on Friday but posted its strongest mid-week gain in nearly three months after recovering from record lows last week. The rupee closed at 83.34 against the US dollar, little changed from its previous close of 83.3150. The euro rose 0.15% for the week, its strongest gain since the week ended February 2.
The rupee fell to a record low of $83.5750 last week, but is showing signs of recovery after the Reserve Bank of India’s intervention and concerns about escalating conflicts in the Middle East subsided.
Gaurang Somaiya, foreign exchange research analyst at Motilal Oswal Financial Services, said that in the near term, the domestic currency is expected to remain in the dominant range with a potential profit cap near 83.20.
The dollar index hit 105.6, while most Asian currencies were range-bound.
corporate activities
With major corporate activities underway, Thursday May 2nd will be the ex-rights date and record date for the 1:1 rights issuance. Sub-division Bhagiradha Chemicals and Industries; 360 One WAM, CRISIL’s interim dividend. Friday, May 3rd will be the ex-rights and record date for Sanofi India. ABB India is scheduled to hold its general shareholder meeting on May 3.
technical factors
In truncated holiday weeks, monthly car sales and low turnout in the second phase are also likely to impact market sentiment.
On technical charts, Meena of Swastika Investmart sees both Nifty and Bank Nifty facing resistance at important levels. “Nifty is unable to sustain above 22,530, leaving 22,400-22,200 area as immediate support. Key support level lies at 100-day moving average (DMA) near 21,900. If Nifty exceeds 22,620, it will hit series highs in May. A potential rally to a series high is possible, otherwise we can expect continued volatility in the 21,800-22,500 range,” he said.
Bank Nifty, although relatively strong, struggled to stay above 48,600. He said a sustained break above this level could trigger a move towards 50,000. Immediate support is at 47,800 and the critical support level is lower at 47,200, Meena said.
FII/DII action
Foreign institutional investors (FIIs) were net sellers of Indian stocks and shares worth Rs 3,408.88 crore on Friday, while domestic institutional investors (DIIs) were net buyers worth Rs 4,356.83 crore.
The performance of domestic and foreign investors will affect the movements of the domestic stock market.
IPO action
After JNK India’s solo IPO last week, the major markets went back into hibernation in the motherboard segment with no new public offering taking place next weekend. However, it is expected that three small business issues and four listings will still attract investors’ attention. JNK India’s public offering, which received over 28 healthy subscriptions, will also see the shares listed on the stock exchanges.
crude oil
Oil prices remain an important factor for markets as they influence inflation and the interest rate trajectories of global central banks, including India’s. India’s oil minister on Friday said the current market volatility was being caused by OPEC oil producers rather than the Middle East conflict. The Street will be tracking price action next week even as the Federal Reserve announces its policy.
Brent crude futures closed at $89.35 per barrel on Friday, up $0.370, or 0.42%, while the U.S. WTI contract closed at $83.68 per barrel, up $0.09, or 0.11%.
On MCX, the April crude oil contract settled at Rs 6,995, up Rs 4,0.06 per cent.
bond yield
Indian government bond yields closed slightly lower on Friday after a choppy week as interest in US Treasuries and oil prices continued. The benchmark 10-year yield closed at 7.1870%, following its previous close of 7.2061%. Yields fell 4 basis points for the week after rising a total of 16 basis points over the past three weeks.
“Bonds have been very resilient to sharp movements in global risk-free rates and crude oil prices. They may continue to be so unless crude oil prices break out, especially with the U.S. bond market already pricing in a cut this year. ICICI Securities Primary Dealership Abhishek Upadhyay, Chief Economist, said:
(Based on the opinion of the institution)
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own and do not represent the views of The Economic Times.)
