Q1 Earnings, Rupee, Q2 US GDP Data, Other Factors to Watch

Investors added more than a whopping Rs 9 trillion in the week ending Friday as Indian stocks rose steadily. Over the past seven weeks, the Indian stock market this time marked its best week since February 2021 by closing at its highest level. Cumulatively, the stock indices, Sensex and Nifty, are up around 3-4% this week.

This week, market participants will react first to earnings from index heavyweights Reliance Industries, Infosys, ICICI Bank and Kotak Mahindra Bank. There could be caution and volatility next week, especially ahead of the US Fed meeting and monthly futures and options expiry, although global bulls should have the upper hand as we saw a 10% rally in the past five weeks from 52-week lows, experts said.

Ajit Mishra, Vice President – Research, Religare Broking, said, “The week ahead is action-packed as we have several important data and events lined up. First, participants will react to the results of index heavyweights such as Reliance, Infosys, ICICI Bank and Kotak Bank in early trades. On the global front, the US Fed’s July 27 interest rate decision and July 28 US GDP data will be watched closely. Meanwhile, the scheduled expiration of derivatives contracts in July will keep participants busy.

Key Factors That Will Affect Traders This Week

Q1 results

Over 400 companies are going to release their corporate earnings dashboards next week including 18 Nifty50 companies which are Axis Bank, Tata Steel, Tech Mahindra, Asian Paints, Bajaj Auto, Larsen & Toubro, Bajaj Finance, Maruti Suzuki India, Tata Motors, Bajaj Finserv, Dr Reddy Laboratories, Nestlé India, Shree Cement, SBI Life Insurance Company, Cipla, HDFC, NTPC and Sun Pharma.

FOMC meeting

Globally, investors will be watching closely for the results of a two-day meeting of the Federal Open Market Committee (FOMC) on July 26-27. Most analysts are expecting a 75 basis point hike in interest rates, which could be in line with expectations as the Fed at the previous meeting hinted at a 50 to 75 basis point hike. , but if it’s a percentage point, that might come as a bit of a surprise. The rate action will aim to keep inflation in check but without hurting the labor market, the experts said.

Aside from the Fed meeting, US GDP growth estimates for the second quarter of the current calendar year will be closely watched by investors next week.

Commodity prices

“Crude oil has cooled to $96/barrel, and many are cheering it on as a signal of slowing inflation. but given the inflationary environment, you never know when prices will start to soar again, so commodity prices will be a crucial trigger to watch,” said Sonam Srivastava.

FII’

FIIs appear to have renewed their buying interest in India as they became net buyers on a weekly basis for the first time after several months, buying shares worth more than Rs 4,000 crore during the week ended July 22. As a result, their net sale for the month was significantly reduced to Rs 6,400 crore from Rs 10,000 crore for July.

Falling dollar index, stabilizing oil prices, lower prices of other commodities and reasonable valuations after the recent market decline may be some of the reasons for the renewed confidence in the FII office. Their flow will be watched closely in the coming days as the Fed is expected to announce its interest rate decision next week.

Santosh Meena, Head of Research at Swastika Investmart Ltd., said, “It will be interesting to see how FII behaves as after a long time they become a net buyer for the week.”

Domestic Institutional Investors (DIIs) remained net buyers over the past week, buying shares worth Rs 940 crore, taking the total monthly inflow to Rs 8,300 crore in July , which completely compensated for FII’s outings.

Clever technical insights

“Technically the market is in strong bullish momentum, but 16,800 is an immediate hurdle for the Nifty, then 200-DMA around 17,000 will be the next critical hurdle, so the 16,800-17,000 area will be an area of sacrosanct supply where we can expect profit bookings however, a decisive move above 17,000, can lead to a strong rally in the market, on the other hand, 100-DMA around 16,500 will be a support level immediate, then 16340 will be the next level of critical support,” Meena said.

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