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IIP, inflation data, global cues to steer market in the week ahead

NEW DELHI: It was a brutal week for the bulls on Dalal Stree..

NEW DELHI: It was a brutal week for the bulls on Dalal Street as headline indices Sensex and Nifty shed over 2 per cent each in the last five sessions. Heavy selloff in the banking stocks coupled with weak global sentiments and sustained selling by FIIs roiled the market.

On Friday, the S&P BSE Sensex settled at 33,307, down 44 points while the broader Nifty50 index of National Stock Exchange (NSE) ended 16 points lower at 10,227.

Here’s a look at the key events/developments that the market may react to in the coming week –

Macro data
Macroeconomic numbers such as industrial production data for January and inflation number for February will be disclosed on Monday, March 12. Industrial output grew by 7.1 per cent in December against 2.4 per cent in the year-ago month. The consumer price index (CPI) or retail inflation stood at 5.07 per cent in January 2018, lower from 5.21 per cent in December 2017. Inflation data based on wholesale price index (WPI) for February 2018 will be released on Wednesday, March 14. WPI eased to a six-month low of 2.84 per cent in January on cheaper food articles even as vegetable prices continued to rule high.

Four IPOs to hit Street
It will be raining IPOs, as four back-to-back issues are lined up for the week. The initial public offer of state-owned defence equipment maker Bharat Dynamics (BDL) will open for subscription on March 13 to raise around Rs 960 crore. The price band of the issue has been fixed from Rs 413 to Rs 428 per share. The issue will close on March 15.

Kolkata-based Bandhan Bank is slated to launch its issue on March 15 to raise Rs 4,473 crore. The lender has set a price band of Rs 370 to Rs 375 per equity share with face value of Rs 10 each and of the total issue size of 11.92 crore shares.

This apart, state-owned Hindustan Aeronautics' Rs 4,200 crore initial public offering (IPO) will open for subscription between March 16 and March 20. Another company, Karda Construction is also slated to come up with its IPO on March 16. The company is expected to raise Rs 77.40 crore.

GST Council meeting
Investors are likely to take some cues from the 26th GST Council meeting that concluded on Saturday. The Council failed to come up with any conclusive simplification process after deliberating on two models and has now postponed the decision for next meeting, but E-way bill will be implemented from April 1. Finance Minister Arun Jaitley expressed concern that revenue was not growing as expected post GST.

Global cues
The US economy added a solid 3,13,000 jobs in February, which was much stronger than the economists expected and the biggest gain since July 2016. However, wage growth slowed down a bit suggesting only a gradual increase in inflation this year. The robust payrolls number has made it almost certain that the Federal Reserve will increase interest rates at its March 20-21 policy meeting. Sluggish wage growth, however, left economists divided on whether the US central bank would upgrade its rate forecast for this year to four hikes from three, Reuters reported.

The minutes of Bank of Japan's policy meet will be out on Tuesday, March 13. BoJ left key rates unchanged in its last meeting concluded last week.

Nifty may slide to sub-10,000 levels
Technical charts do not offer a cheerful outlook for the upcoming sessions. The Nifty50 on Friday faced stiff resistance around the 10,300 level and ended up near its intraday low level, forming a bearish candle on the daily chart. "The 10,140-10,350 range has become a no trade zone for the market. If any negativity has to resume, it would only happen after the violation of 10,140,” Sameet Chavan of Angel Broking said. Chavan does not expect Nifty to surpass the 10,350 hurdle in coming days.

“The index is likely to first slide towards 10,033 and then a possibility of entering sub-10,000 levels cannot be ruled out,” he said.

Chandan Taparia of Motilal Oswal says the index has been respecting a recent swing low of 10,141. Unless this level is negated on a closing basis, expectation remains high for a consolidation.

Keep an eye on rupee
The domestic currency could turn volatile in the medium term as import tariffs proposed by the US threaten to temporarily upend the flow of global trade. A combination of two factors – the rhetoric on trade and interest-rate movements could cause the local unit to lose up to 2.5 per cent in the coming weeks, ET reported citing dealers. "If the Trump tariff causes any global trade war influencing the currency market, India cannot remain immune to global currency moves," said Manish Wadhawan, MD, HSBC India.

Stocks in focus
Shares of IDFC Bank and Capital First are likely to hog limelight as the Competition Commission of India (CCI) gave approval to the merger deal between the two companies. Under the deal, IDFC Bank will issue 139 shares for every 10 shares of Capital First. This apart, telecom major Bharti Airtel may also be on investors' radar as reports suggest the company is planning to raise up to Rs 3,000 crore through non-convertible debentures.

Original Article


ET Markets


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