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Global factors, macro data and earnings to guide market trends this week: analysts

Trends in global markets, inflation, the release of industrial production data and quarterly earnings will dictate the movement of equity benchmarks this week, analysts said, adding that volatility could also continue amid a flurry of macroeconomic data announcements around the world.

In addition, foreign fund movements, crude oil prices and the trend of the rupee would also act as major drivers for the equity market, they added.

“The direction of global stock markets as well as the development of the dollar index and crude oil prices will continue to dominate while US inflation figures on May 11 and inflation figures and of India’s PII on May 12 will also cause volatility in the market,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Meena said the latest batch of fourth quarter earnings will have stock specific movement with SBI, Tata Motors, L&T, UPL, Tech Mahindra and Cipla are among the key results expected to be announced.

“This week, participants will first react to Reliance figures that were announced post-market on Friday. In addition, developments on the Russian-Ukrainian front and the performance of global markets will be on the radar. On the macroeconomic front, IIP Production) and CPI (Consumer Price Inflation) data is scheduled for May 12 and the market will be watching these numbers to gauge the next possible move of the RBI,” said Ajit Mishra, Vice President of the research, Religare Broking.

Reliance Industries Ltd of billionaire Mukesh Ambani announced on Friday a 22.5% increase in its net profit for the quarter ended March 2022 thanks to exceptional oil refining margins, steady growth in telecommunications and digital services and a strong momentum in retail trade.

This week, the market will follow inflation numbers across the world, said Vinod Nair, head of research at Geojit Financial Services.

Yesha Shah, head of equity research at Samco Securities, said: “Given the flurry of macro releases, the ongoing earnings season and several IPOs that will be open for subscription, the observed volatility last week should persist. Global market movements will be determined by inflation figures in the United States and China. Data on India’s industrial production, domestic inflation rates and manufacturing output will keep Indian markets on edge.

Sensex Statistics

Last week, the Sensex fell 2,225.29 points or 3.89%, while the Nifty lost 691.30 points or 4.04%. Dalal Street withered under intense selling pressure on Friday, reflecting a slump in global stocks as investors braced to slow global growth amid tightening central bank policy.

The 30-stock BSE Sensex plunged 866.65 points or 1.56% to end at 54,835.58 on Friday. Similarly, the broader NSE Nifty fell 271.40 points or 1.63% to settle at 16,411.25.

“It was the fourth consecutive week of loss for the Indian stock market and it was one of the worst weeks of 2022 following a surprise rate hike by RBI and a sharp fall in global markets after the US Fed policy,” Meena added.

Published on

May 08, 2022