Market Outlook: Key Factors That May Dictate Equity Indices This Week

Key macro-economic data, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), Indian rupee movement against US dollar, crude oil prices movement and last leg of corporate earnings may set the trend of domestic equity indices (BSE Sensex and NSE’s Nifty50) in the coming week. According to market experts, on macro front, trade tensions will continue to remain in focus after the Chinese ministry of Commerce announced 25 per cent additional tariff on $16 billion worth of American goods. 

As we enter the last leg of earnings, the coming week promises to be full of action in a truncated trading session. Abbott India, Cadila Healthcare, Godrej Industries, Greaves Cotton, Tata Chemicals, Tata Steel, Allahabad Bank, GMR Infra, Grasim Industries and Sun Pharma are expected to announce their Q1 earning results next week. This may dictate the trend of bourses in the week ahead.

The domestic stock market will remain shut on Wednesday, August 15, 2018, on account of Independence Day.

According to Gaurav Jain, Director, Hem Securities, “The coming week promises to be action-packed as last leg of big corporate earnings will begin to flow. We will continue to see stock-specific approach as some F&O (futures & options) scrips are scheduled to report their quarterly earnings.”

Apart from corporate earnings, traders will also keep an eye on macroeconomic data. “Consumer price inflation, wholesale price inflation, and the trade data for the month of July will be announced in the coming week. Currency moves and crude oil prices will also be closely watched”, said Rahul Sharma, Senior Research Analyst, Equity99.

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According to Viral Berawala, CIO, Essel Mutual Fund, “With results season behind us market direction would also be driven by global factors. The financial volatility in emerging markets remains elevated. On Friday, the Turkish lira was down by more than 15 per cent after US imposed further sanctions.”

Meanwhile, on the currency front, the Indian rupee closed at 68.83 on August 10, weakened by 22 paise from its previous week’s close of 68.61 per greenback. 

Domestic stock markets closed on a negative note on Friday. However, both the key indices posted a weekly rise. The BSE Sensex recorded a rise of 313.07 points, or 0.83 per cent, while the NSE Nifty advanced 68.70 points, or 1.01 per cent. However, Nifty continues to venture in to uncharted territory as it inched closer to the 11,500-zone.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) bought scrips worth Rs 992.18 crore in the last week.

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