Indian stock market ended the previous week on a strong note as every sector participated in the bull run, lifting equity benchmarks Sensex and Nifty by 3 per cent each. The rally was supported by positive cues from global counterparts, easing oil and commodities prices. The benchmark share indices hit one-month high during the week ended July 8. The BSE Sensex rallied 1,574 points to 54,482, while the Nifty50 climbed 468 points to 16,221, the highest closing level since June 9, continuing uptrend for third consecutive week.
Volatility index India VIX ended at 18.40 down by 4 per cent. The BSE Sensex surged by 303 points to 54,482 mark. Nifty 50 has decisively surpassed its crucial downward slopping trendline resistance level of 16,020 on daily and weekly chart. Speaking on the stock market wrap for the week gone by, Rahul Shah, Head Of Research at Equitymaster said, “There have been 11 occasions in the past 30 years where the stock markets have earned a negative return for the first half of the year. And only in 2 out of those 11 have the markets recovered during the second half to close the year with decent returns. So, history is definitely not in favour of the markets recovering in the second half. Even at the macro level, there are still a lot of headwinds like inflation, crude and geopolitical events that may nip any recovery in the bud.”
In this week, the market may first react to the quarterly numbers of TCS and Avenue Supermarts announced over the the weekend. Overall the market is expected to remain positive but the profit booking at higher levels to some extent can’t be ruled out, with likely more stock specific action due to ongoing corporate earnings season and with focus on June inflation numbers by India & US, experts feel.
Q1 Earnings
The June 2022 quarter earnings season will be in full swing in the coming week with around 70 companies releasing their numbers including prominent ones like HCL Technologies, HDFC Bank, ACC, Mindtree, Larsen & Toubro Infotech, Jindal Steel & Power, Tata Elxsi and Tata Metaliks.
Among other numbers to watch out for would be Federal Bank, L&T Technology Services, 5paisa Capital, Spandana Sphoorty Financial, Anand Rathi Wealth, Delta Corp, Sterling and Wilson Renewable Energy, Angel One, Butterfly Gandhimathi Appliances, GTPL Hathway, Shakti Pumps (India), Tata Steel Long Products, Den Networks, Bharat Electronics, and ICICI Prudential Life Insurance Company.
Dollar Index
“After breaching its strong hurdle placed at 105.85 levels, dollar index has surged up to its 20-year high of 1.7.78 levels. This has put strong pressure on most of the asset class including equities. Any ese or further rise in the index may have a direct impact on the equity markets across world. So, market investors are advised to remain vigilant about the movement in dollar index,” said Anuj Gupta, vice president — Research at IIFL Securities.
CPI Inflation
Another key event to watch out for will be CPI inflation numbers for June month scheduled to be released on coming Tuesday, along with industrial output data for the month of May.
“We expect CPI inflation to remain elevated, at 7.0 percent YoY, in June 2022, as several factors offset each other. Imported inflation remains the key driver of higher prices, but we expect tax cuts, RBI rate hikes and signs of stabilising food prices to anchor inflation in coming months,” Rahul Bajoria, MD & Chief India Economist at Barclays said.
Industrial production in April climbed to 7.1 percent YoY, which was better than the economists’ expectations of around 5 percent.
Apart from that, WPI inflation data for the month of June will be released on coming Thursday, while deposit & bank loan growth for the fortnight ended July 1, foreign exchange reserves for the week ended July 8, and balance of trade data for June will be announced on coming Friday.
US inflation data
“US inflation data is expected next week and it will give an idea about the impact of US Fed’s hawkish stance on interest rates. So, one has to remain informed about the developments in regard to US inflation data coming next week. Any disappointing figure in US inflation data is expected to put additional selling pressure on most of the asset class,” said Anuj Gupta of IIFL Securities.
Crude Oil
US Treasury Secretary Janet Yellen is traveling to the Indo-pacific region next weekend will seek support for capping the price of Russian oil. So, global equity market is expected to respond on both positive and negative outcome of this visit as spike in crude is expected to fuel global inflation that may go against equity markets.
Read all the Latest News, Breaking News, watch Top Videos and Live TV here.
Comments
0 comment