Stock outlook: RBI meeting, auto sales among 8 key factors that could guide markets this week

New Delhi: The domestic stock market continued to hold firm on favorable global indices, which pushed the indexes higher. Sensex hit the 57,500 mark during the week, with Nifty50 settling above the 17,150 level.

Both benchmarks rose almost 3% during the week and this is their best weekly performance in several months. The broader markets (mid and small cap indices) gained more than one percent each.

Among the sector indices, metals shone the brightest with an 8% rally, while IT, reality and media stocks were the other best performers.

Ajit Mishra, Vice President – Research,

Broking said participants should align their positions accordingly and look for buying opportunities on dips. All sectors contribute to the movement.

“We believe the focus should always be on the top performers rather than expecting a turnaround from the beaten names,” he added. “We reiterate our preference for automotive, FMCG, banking and finance and remain selective in others.”

Back to recommendation stories



Below are the eight key factors that could guide the markets this week:

RBI Monetary Policy Meeting

Led by Governor Shaktikanta Das, the Monetary Policy Committee (MPC) meeting has been rescheduled for August 3-5 instead of the August 2-4 announced earlier.

Upasna Bhardwaj, Chief Economist,

expects RBI to raise the repo rate by 50 basis points in the upcoming policy, while BofA Securities expects a 0.35% hike in the main repo rate at its meeting.

Automotive sales figures
India’s automotive industry is expected to witness robust demand in July across all segments except the tractor segment, according to a report by

.

The passenger vehicle segment is expected to see healthy demand driven by a strong backlog and a ramp-up in automaker production as the chip shortage issue subsides. The two-wheeler segment should be in the green.

1st quarter results
India Inc’s earnings season will continue its momentum as the number of investor favourites, including blue chips like ITC, UPL,

GAIL (India), Titan and M&M will announce their results for the quarter ended June 30, 2022.

Varun Drinks,

Kubota, , , Bosch, , , , Godrej CP, , , Nykaa and are some of the other prominent names due to release their Q1 numbers.

PMI numbers

Over the next week, the Purchasing Managers Index or PMI figures for India will be announced, which will provide insight into global growth, inflation and labor market trends in the main savings for the month of July.

June’s PMI growth hinted at a deteriorating economic environment, showing a decline in activity in the United States and the eurozone as the cost of living crisis and monetary policy tightening hit Requirement.

GST collections
The Ministry of Finance, on behalf of the Government of India, will announce its collections of the Goods and Services Tax (GST), which has been all the rage lately after the GoM increased the rates on daily utility packaged food.

GST collections rose 55.8% year-on-year to Rs 1,44,616 crore in June (for sales in May), the second highest level since the July 2017 rollout of the indirect tax scheme, according to data published by the ministry.

Foreign flows
Global investors turned net buyers in July, which came as a major surprise to the street after relentless selling for more than two quarters. The direction of global investors will also guide the movement of the markets in these turbulent times.

Rupee weakness

After hitting the 80 level, the Indian Rupee recorded a rapid recovery like the US Dollar and has been stable lately. Weak US GDP and softer tone from the Fed supported the national currency. However, the movement of the Rupee against the Greenback will be a key factor in determining the selling pressure in the equity space.


Technical outlook


The bulls have made a strong comeback. Seasonally, July was the second best month for markets. Such a close will not disappoint bulls in any way, says Apurva Sheth, Head of Market Outlook, Samco Securities.

“We should take some bets off the table now,” he added. “The trend is still bullish and investors can look for entry points around the 16,800 and 16,600 levels.”

Leave a Comment

Your email address will not be published.