This Week’s Stock Market Risks Include Q1 Earnings, CPI Data, US Inflation, and Other Aspects

This Week’s Stock Market Risks Include Q1 Earnings, CPI Data, US Inflation, and Other Aspects

For the third consecutive week that concluded on August 5, the market continued to rise, with the benchmark indexes climbing 1.4%, despite volatility and rangebound movement brought on by the Reserve Bank’s most recent rate hike and a simmering geopolitical conflict involving China and the US over Taiwan. The market gains were bolstered by optimistic July auto sales statistics, persistent FII purchasing interest, declining oil prices, and dropping oil prices. The Nifty50 increased by barely 15 points to 17,397 while the BSE Sensex increased by 89 points to 58,388.

The analysts thought that global cues, macro figures, and the final round of results will be crucial determinants of how the market performs in the week beginning July 8. Due to the Muharram holiday, the market (NSE and BSE) will be closed on Tuesday, August 9. On August 15, when India commemorates its 75th anniversary of independence, and on August 31, in observance of Ganesh Chaturthi, the NSE and BSE will likewise be quiet.

Thanks to ongoing FII purchases, the Indian equity markets posted gains for a third straight week. However, volatility has increased as a result of the market being slightly overbought in the short term, as well as some geopolitical concerns, according to Santosh Meena, Head of Research at Swastika Investment Ltd.

The market will react to SBI, HPCL, and BPCL results on Monday as the last round of Q1 earnings comes to light. Other noteworthy earnings next week will come from Adani Ports, Bharti Airtel, Powergrid, Coal India, Eicher Motors, Hindalco, Grasim, Heromotocorp, LIC, ONGC, Bata India, and Aurobindo Pharma. In light of the growing geopolitical unease, both domestic and international macroeconomic indicators will be crucial, according to Meena.

Q1 Results

We will be in the final week of the June quarter results season, thus more corporations will submit their quarterly corporate scorecards. Next week, about 2,400 businesses will release their financial results, including significant ones like ONGC, Bharti Airtel, Adani Ports, Power Grid, Coal India, Eicher Motors, Hindalco Industries, Tata Consumer Products, Divis Laboratories, Grasim Industries, Hero MotoCorp, and several others.

Before the June quarter, attention will also be paid to Life Insurance Corporation of India, NALCO, AstraZeneca Pharma India, City Union Bank, Delhivery, Vedant Fashions, Samvardhana Motherson International, Sun Pharma Advanced Research Company, Torrent Power, Whirlpool of India, ABB India, Vectors Food Specialties, IDFC, Indraprastha Gas, MRF, MTAR Technologies, Nuvoco Vistas Corporation, Prestige Estates Projects, So

Dollar Index

The pressure on the world equity markets will increase as a result of the Dollar Index’s recovery from its 105 support levels. According to Anuj Gupta, Vice President Of Research at IIFL Securities, “New buying in the US dollar may eliminate the pressure imposed by the European Central Bank, Bank of England, and other central banks on the US currency.

Inflation and Industrial Output

On Friday, the industrial output for June and the CPI inflation for July will be made public. The most important data to keep an eye on is the CPI inflation rate, which has been declining month over month to 7% in June after reaching an eight-year high of 7.8% in April. However, the RBI kept its FY23 inflation forecast at 6.7 percent in its policy meeting, assuming oil at $105 per barrel and a normal monsoon in 2022, and expects it to fall below its 6 percent threshold in Q4FY23 and Q1FY24.

FII Data

Even if the benchmark indexes have increased by more than 1%, August got off to a solid start thanks to foreign institutional investors who were net buys every day for the first time in a week in several months. Because of this, the market has maintained its gains over the past 1.5 months despite the turbulence, albeit DIIs have taken advantage of the opportunity to take some profit off the table.

Nifty Technical View

In the battle between bulls and bears, the Nifty50 made several unsuccessful attempts to retake the key resistance level of 17,500 but ultimately failed. On the weekly charts, a bullish candlestick pattern formed, while on the daily scale, a Doji-type pattern formed, signifying market participants’ uncertainty about the direction of the market going forward. The good news is that the bulls successfully defended the bullish gap zone (17,158-17,243) they established on August 1 and took support around 17,150-17,200, the day’s low, despite bears’ attempts to do so on August 4.

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