Global cues, macro numbers and Q3 earnings to steer stock market in the week ahead
NEW DELHI: The domestic equity market witnessed highly volatile trade during the week gone by. Selloff on Wall Street amid fears of rising inflation, higher interest rates and a spike in US Treasury yields engulfed stock markets globally, including in India.
On Friday, the S&P BSE Sensex shed 407 points to close at 34,006 while the broader Nifty50 index of the National Stock Exchange (NSE) lost over 1 per cent, or 122 points, to settle at 10,455. On a weekly basis, the Nifty50 lost 2.84 per cent while the 30-share Sensex pack declined 3.02 per cent.
Among key highlights of the week, RBI kept the repo rate unchanged in its sixth bimonthly money policy review on Wednesday while maintaining a neutral stance. However, it did flag concerns on inflation.
From the earnings corner, country's largest public sector lender SBI took everyone by surprise when it reported a massive quarterly loss on the back of a spike in provisions towards bad loan and hardening of bond yields, which led to treasury losses. On the other hand, steel giant Tata Steel's Q3 net jumped five-fold to Rs 1,136 crore from Rs 232 crore reported for same period last year.
Here's a look at the events and triggers that may decide market direction next week. The market will remain closed on Tuesday, February 13, 2018, on account of Mahashivratri.
Global cues hold key
Movement in US stocks and in Asian markets will be watched keenly. On Friday, US equities ended higher, but posted their worst weekly loss in two years. The sharp falls of the week confirmed that the market was in a correction, down more than 10 per cent from its January 26 record high, and throwing the nearly nine-year-long bull market off course, said a Reuters report. The benchmark S&P500 fell 5.2 per cent for the week, its biggest weekly percentage drop since January 2016. Asian indices such as Nikkei and Hang Seng also witnessed heavy selloff.
Nifty may rally when volatility eases
Nifty's recent gap-down openings suggested fear among the traders, but post such openings, the market did not witness follow-through selling at least for that day, said Mazhar Mohammad of Chartviewindia.in. "This kind of behaviour points to some accumulation at intraday low points. Hence, there will be a higher possibility of a rally once volatility subsides in global financial markets," Mazhar added. Chandan Taparia of Motilal Oswal Securities said if the index manages to cross and hold above 10,500, a bounceback towards 10,600 and 10,650 levels cannot be ruled out.
Next set of quarterly results
Next batch of quarterly earnings will continue to influence stocks in the holiday truncated week. Among notable names, Bank of India, Britannia Industries and GAIL (India) will announce their Q3 numbers on Monday, February 12 while NBCC (India) and NMDC will release theirs on Tuesday, February 13. Godrej Industries, Grasim Industries, Jet Airways (India), Nestle India, Sun Pharmaceutical Industries and Tata Power Company are slated to announce their December quarter earnings on Wednesday, February 14.
A lineup of macro data
Key economic indicators such as December IIP, January CPI & WPI inflation data are scheduled for release during the coming week. The industrial production data for December 2017 will be out on Monday, February 12. Industrial production rose 8.4 per cent in November 2017 compared with just 2.2 per cent in October 2017. Data based on consumer price index (CPI) for January 2018 is also scheduled to come on Monday, 12 February 2018. The CPI inflation spiked to a 17-month high of 5.21 per cent year-on-year in December of 2017. Inflation based on wholesale price index (WPI) for January 2018 will be announced on Wednesday, February 14. Wholesale price inflation cooled to 3.58 per cent in December. It had risen 3.93 per cent in November and 2.1 per cent in December last year.
Aster DM Healthcare to launch IPO
Private healthcare service provider DM Healthcare is slated to launch its initial public offer (IPO) on Monday, February 12, 2018. The IPO comprises fresh issue of equity shares worth up to Rs 725 crore and an offer for sale of up to 1,34,28,251 shares by the company's promoter Union Investments. The price band of the company has been fixed at Rs 180-190 per share with face value of Rs 10 each. At the upper end of the price band, the IPO is expected to fetch Rs 980.13 crore. The issue will close on February 15, 2018. This apart, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate trend on the bourses.