Weekly Outlook: 10 factors to move markets July 4-8. read here

On Friday, Sensex closed at 52,907.93 111.01 points or 0.21% lower. Nifty 50 finished at 15,752.05 28.20 points or 0.18% less.

Last week, both the Sensex and the Nifty 50 were down almost 1% each.

Yesha Shah, director of equity research at Samco Securities, said: “Market it is expected to remain volatile due to a series of market moving events. On the macro front, investors will be watching the FOMC minutes to see where the economy is headed. In addition, global markets would be influenced by China’s inflation figures due to be released next week. Back home, the first quarter of fiscal year 2023 Profits the season will drive market sentiment and stock specific actions. Investors should pay close attention to management commentary and select companies with strong fundamentals to focus on the long-term picture.”

1. Earnings:

The June quarter 2022 (Q1FY23) earnings season will kick off this week with IT giant Tata Consultancy Services (TCS) announcing its financial performance for the period on July 8, followed by Avenue Supermarts (Dmart) earnings on July 9th.

Sameer Pardikar, research analyst at ICICI Securities, said last week that “the recent correction in IT stocks could be an indication that revenue growth in FY23 could be healthy, but could be slow from FY24 due to a possible recession in the US, which could subsequently lead to a reduction in technology spending by some of its largest clients.In this context, LTI had issued cautious comments on growth prospects in the fourth quarter, while other companies were still bullish on demand. We think the growth outlook, plus color in churn in the first quarter of FY23 is expected to set the tone for the FY24 numbers.” .

2. FOMC Meeting:

Investors will be watching the FOMC minutes due on July 6 to see where the economy is headed.

Last month, the FOMC raised the target range for the fed funds rate to 1.75%, the biggest increase in 28 years. In addition, the FOMC stated that it will continue to reduce its holdings of Treasury securities and agency debt, and agency mortgage-backed securities. It is firmly committed to bringing inflation back to its 2% target.

3. Operating performance for the first quarter:

Many auto companies have announced their sales data for the first quarter of FY23 and June 2022. ICICI Direct in its note said that wholesale shipments for June 2022 were flat with most segments reporting month-on-month growth of neutral to positive. The CV space continues to witness a secular MoM growth trend and outperformed the OEM pack with an encouraging double-digit recovery in the M&HCV segment. In the 2W package, MoM performance was almost flat, with Bajaj Auto being an exception, with the company reporting ~27% MoM growth, albeit on a low basis (affected by supply-side issues). The PV space also witnessed flat MoM performance with Tata Motors leading the way. The tractor space reported muted prints, i.e. a double-digit year-over-year decline amid the wheat export ban imposed in late May 2022 and the filling of the canal in previous months.

In addition, metal companies are also announcing their operating performance data for June and the Q1FY23 quarter. While bank stocks will be in the spotlight as bankers have started to release their Q1FY23 net deposit and advance data ahead of their earnings. These sectors will be in focus and will help move the market.

4. F&O expiration:

Investors held a bearish stance at the start of the July derivatives run as recession fears remain a killjoy amid rising inflation, tightening monetary policy and rising commodity prices. .

ICICI Direct in its research note said that despite the June F&O deal, the Nifty lacked momentum and finished almost flat. Financial stocks were the biggest gainers, while metals, IT and autos were among the biggest losers. For the past few days, the Nifty has been stuck in a range of 15700-15900. Therefore, to gain any directional move, a breakout on either side of the mentioned range would be critical.

For the July 7 expiration, ICICI Direct said it would sell the Nifty 16,100 call option in the range of $42-44 Objective: $18 Loss limit: $58. They said, buy the Bank Nifty future in the range of 33500-33550 Target: 33750-33850 Stop loss: 33300.

There are currently no actions on the F&O ban.

5. FPI output:

From the Indian market, foreign portfolio investors (FPIs) withdrew approximately $811 crores on July 1. FPIs have been net sellers all year so far. In the first half of 2022 (January – June this year), FPIs withdrew money for a huge sum $2,27,290 crores from the Indian market.

In general, the exit of FPI from the Indian market is of the order of $2,28,101 crores.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “FPIs are selling more in countries with growing current account deficits (CADs) like India because the currencies of such countries are vulnerable to further depreciation. Towards end of June, FPI sales have shown a downward trend. If the market rises in July anticipating or responding to the good results of the first quarter, FPI can sell again. This trend will stop only when the dollar stabilizes and US bond yields decline.

6: Crude oil prices:

Crude oil prices surged on Friday last week due to supply cuts in Libya, an oil and gas workers’ strike that sparked fears of a lockdown in Norway, and an economic slowdown that possibly dented the economy. demand weighed on feelings. Brent crude rose 2.4% to settle at $111.63 a barrel, while US WTI crude rose more than 2.5% to $108.43 a barrel.

Meanwhile, bond yields fell significantly on Friday. The 10-year Treasury yield, whose performance is measured by setting mortgage rates, fell to 2.89% from 2.97% the day before. The 2-year Treasury yield decreased to 2.83% from 2.92%.

The Indian government last week imposed a special excise tax of $6 per liter on exports of gasoline and aviation turbine fuel (ATF) and $13 per liter in diesel exports. Major oil stocks such as ONGC, Oil India and Reliance Industries tumbled as new taxes signaled a tighter outlook for the energy market.

7. Geopolitical tension:

Uncertainty over the war between Russia and Ukraine continues to point to a bearish market tone for the week.

According to a Reuters report, Russia said it had taken full control of Ukraine’s eastern Lugansk region on Sunday after capturing the last Ukrainian stronghold of the city of Lysychansk, where Kyiv said it had withdrawn to save the lives of its troops.

However, Ukrainian President Volodymyr Zelensky denied the Kremlin’s claim to capture Lysychansk.

8. Macroeconomic data:

The US will announce factory orders for May on July 5. In addition to the FOMC minutes, data on vehicle sales for June 2022, S&P Global Services PMI, Composite PMI and ISM Non-Manufacturing PMI for June will also be released on July 6. claims data will be released on July 7 and nonfarm payroll data will be announced on July 8.

In the European Union, May PPI data is due for release on July 4, June S&P Global Services & Composite PMI is due for release on July 5, and June S&P Global Construction PMI and May retail sales data are due for release. will be announced on July 6. .

Japan will also release its PMI data on July 5 and household spending data on July 8.

China is set to announce its PMI data for June on July 5, with inflation along with PPI and vehicle sales data due on July 9.

9. Indian Rupee:

On Friday, the rupee hit a new record low of 79.12 before closing at 78.94 per dollar plus 12 paise. The performance comes during the time the government decided to increase the gold import duty from 10.75% to 15% to curb imports.

Manish Jeloka, Co-Head of Products and Solutions at Sanctum Wealth, said: “FII sales in equity markets, higher imports due to higher crude prices, higher commodity prices and importers now coming in to hedge are the factors that contributed to the INR is at record lows,” adding, “for USD-INR 80 is a great psychological level. There seems to be an intervention from the Central Bank to help a soft landing. Expected “The INR will continue to outperform most other emerging market currencies. This is because most factors, such as higher oil and commodity prices, affect everyone.”

10. Company actions:

Shares of JSW Steel and Petronet LNG will become ex-dividend on July 4 before their record date. Companies such as AstraZeneca Pharma, Axis Bank, Bank of India, GSK Pharma, DCM Shriram and Oberoi Realty set their record dividend date on July 8, meaning shares will become ex-dividend on July 7.

The ex-dividend date, also called the reinvestment date, is a term related to the timing of the payment of dividends on shares of listed companies.

HDFC Bank and HDFC have received a green signal from the stock exchanges. IndusInd Bank and Federal Bank have announced their advances and net deposits data for Q1FY23.

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