Stock Market Next Week! 10 factors that could drive action on Dalal Street in next 5 trading sessions
Giving a glimpse of the weekly market outlook, Vinod Nair, Head of Research at Geojit Financial Services, said, "The domestic market remained in the consolidation phase throughout the week as the market lacked major positive domestic cues to withstand the negative pressure from global markets
The India markets closed in the red on Friday for the fourth straight trading session. Nifty50 fell by 86 points, while Sensex was down 361 points to close at 17,532 and 58,766. Benchmark Nifty closed 1.8% down and 30-stock Sensex ended 2.1% low for the week ended October 1, 2021.
Benchmark indices fell for the fourth consecutive day on weak global cues, Binod Modi, Head - Strategy at Reliance Securities, told PTI. Heavy selling pressure on financials (excluding PSU banks) and IT dragged the index. However, buying was seen in pharma, metals and PSU banks.
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Bajaj Finserv was the top loser in the Sensex pack, shedding over 3 per cent, followed by Maruti, Bharti Airtel, Asian Paints, Bajaj Finance and HDFC. On the other hand, M&M, Dr Reddy's, UltraTech Cement and PowerGrid were among the gainers. M&M, Coal India, IOC were top gainers in Nifty50, while Bajaj Finserv, Maruti and Asian Paints were top laggards.
In the last five trading sessions, among the NSE indices, Nifty CPSE, Nifty PSE, Nifty PSU Bank, Nifty Energy and Nifty commodities were the top gainers, while S&P BSE Utilities, S&P CPSE, S&P BSE Power, BSE-PSU and S&P BSE Enhanced Value remained top indices on BSE, tracking various domestic and global developments related to energy and power space.
Weekly market outlook: Expert's Take
Giving a glimpse of the weekly market outlook, Vinod Nair, Head of Research at Geojit Financial Services, said, "The domestic market remained in the consolidation phase throughout the week as the market lacked major positive domestic cues to withstand the negative pressure from global markets. Worries over the US debt ceiling crisis along with an uptick in yield and crude oil price created concerns in the global market. Continued worries over the Chinese economy also added pressure on Asian equities. Eurozone inflation has hit its 13 years high level of 3.4% in September owing to high energy costs."
Nair said India’s core sector output accelerated by 11.6% in August compared to 9.9% growth in July, while the manufacturing PMI rose to 53.7 in September from 52.3 in August, owing to improving demand conditions.
"Auto sales numbers from major manufacturers showed a decline in September sales mainly due to semiconductor supply shortage, however, expectations are high on festival season. On the domestic sectoral front, IT and banking witnessed consolidation ahead of the Q2 result, while PSEs, Metals and Pharma gained momentum, he said.
We have collated a list of 10 factors that could dictate the trend on D-Street in the coming week:
1. RBI Monetary Policy:
The Reserve Bank of India's monetary policy Committee meeting is slated to take place from October 6 to October 8. In this regard, Geojit Financial Services Head of Research said," In the coming week, the RBI is scheduled to announce its monetary policy. The Central Bank is expected to maintain its accommodative stance to maintain adequate liquidity in the system and to support economic activity. India’s service PMI is also due to be released next week."
2. OPEC+ meeting
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, meet on Monday. The group is slowly unwinding record output cuts made last year, although sources say it is considering doing more, reported Reuters. This comes as Oil rose above $78 a barrel on Friday, within sight of this week’s three-year high, supported by tight supplies due to OPEC+ supply curbs, recovering demand and a weaker U.S. dollar, it said.
3. SC hearing on one-time spectrum charges
The Supreme Court will be hearing matters related to one-time spectrum charges on Tuesday, October 5. Earlier, giving relief, the Centre had rationalised the definition of adjusted gross revenues (AGR) to exclude non-telecom revenue and a four-year moratorium on players’ dues to the government.
4. Global cues
Global markets closed on mixed note on Friday. Major Wall Street indices ended the Friday's trading session in the green. The Dow Jones Industrial Average gained 482.54 points or 1.43 per cent to 34,326.46, the S&P 500 added 49.5 points or 1.15 per cent at 4,357.04, while the Nasdaq Composite added 118.12 points, or 0.82 per cent, at 14,566.70. It will be interesting to see how these indices open on Monday.
On the other hand, Asian markets were trading negative lead by Japanese Nikkei 225, which was closed the Friday at 28,771.10, down 681.59 or 2.31%, while SGX Nifty last traded at 17,632.20. Meanwhile, China stock market will remain closed till October 7. The market has been closed on the account of the Golden Week holiday. Chinese market was also closed on Friday.
5. Technical View:
The Nifty50 closed the week ended October 1 with a loss of 1.8 per cent. The index failed to hold onto to its crucial psychological support placed at 17,600 and took support neat 17450 before bouncing back. The index is trading at overbought levels, and there is a possibility of further consolidation in the coming week as well. The index could see some resistance around 17800 levels while support is placed at 17450-17300.
“The over stretched market can surprise us any time and hence we reiterate staying light in the market. We have already witnessed a glimpse of this possibility this week, but structurally nothing has been dented yet,” Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking), said.
“As far as levels are concerned, the upside in the coming week seems capped and we do not expect the Nifty to go beyond the sturdy wall of 17800 – 17950. On the flip side, 17450 – 17300 are to be seen as key supports,” he said.
Chavan advise traders to stay light and follow strict stop losses for existing positions. We are observing good stock specific action in the market.
6. TCS Result on October 8
IT giant Tata Consultancy Services Ltd will be declaring the result for Quarter ended September 30 on October 8. It is expected that TCS may also consider declaring second interim dividend to the shareholders in the board meeting slated on the same day. In the quarter ended June 30, 2021, the company recorded consolidate net sales of RS 45, 411 crore, while consolidated PAT stood at Rs 9031 crore. EBITDA for the the June quarter was RS 12,663 crore.
Note: The data has been compiled from Stock Edge
7. Corporate Actions:
The week starting October 4 will see major corporate actions.
*Man Infraconstruction Ltd.
Man Infra's management will hold meeting to discuss bonus and dividend issue on October 4
*Airtel rights issue
Rs 21,000-crore Bharti Airtel rights issue will open on October 5, for which the price has been fixed at Rs 535 per share.
*Affle India share split
Another major event is lined up for October 7, which is ex-date of Affle (India) share split. Affle (India) share split record date is October 8. Affle (India) board has approved the stock split plan in the ratio of 1:5 to facilitate larger shareholder base and aid liquidity, the company has informed exchanges in late August.
*TCS board meeting
Tata Consultancy Services Ltd board meeting is scheduled for October 8, when the board may consider declaration of a second interim dividend to the equity shareholders.
8. FII & DII Activity in Cash market:
As per the latest data till date, Foreign institutional Investors (FIIs) were net buyers with Rs 131.39 crore and DIIs net seller with Rs 613.08 crore in the cash market.
The rupee reversed early losses and settled for the day higher by 11 paise at 74.12 against the US dollar on Friday, despite a muted trend in domestic equities, said PTI. At the interbank foreign exchange market, the local unit witnessed heavy volatility. It opened on a negative note at 74.33 per dollar as against its previous close of 74.23. It hovered in the range of 74.11 to 74.35 per dollar during the day before ending at 74.12 against the American currency.
10. PMI data:
The Purchasing Managers Index (PMI) for September came on Friday around the market closing time. India's manufacturing sector activities improved in September as companies benefited from strengthening demand conditions amid the easing of COVID-19 restrictions, PTI reported a monthly survey quoting this. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) improved from 52.3 in August to 53.7 in September, indicating a stronger expansion in overall business conditions across the sector. This could impact the market when it opens for trading on Monday.
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