sensex | nifty: LIC IPO, Fed meet among 6 factors that may steer market this week

NEW DELHI: The domestic equity market tightly held consolidation range for the second successive week and finally ended with a cut of nearly half a per cent. Nervousness in global markets combined with a mixed start of Q4 earnings on the domestic front kept volatility high throughout the week.

The new week is a holiday-shortened one and it’s going to be critical as some of the important events and data are lined up. Participants will first react to the auto sales numbers. On the macro front, markets will be eyeing Manufacturing PMI and Services PMI data on May 2 and May 5 respectively.

The much-awaited IPO of insurance behemoth, LIC, is opening for subscription on May 4. On the global front, the US Fed meeting outcome will be in focus.

“Participants should limit positions and focus on identifying the sectors/themes which are showing resilience amid the consolidation bias. Investors, on the other hand, shouldn’t look much into the short-term fluctuations and keep a close watch on the earnings for cues,” said Ajit Mishra, VP Research. Religare Broking.

Below are key factors that will steer markets next week:

Q4 earnings
There are a number of big companies that will come out with their quarterly numbers during the week. This will result in stock-specific movements.

Monday: Britannia, Inox Leisure, M&M Financial

Tuesday: Adani Enterprises, Hero Moto, Network18, TV18 Broadcast, Tata Steel, Titan

Wednesday: Adani Green, Adani Total Gas, CarTrade, Kotak Mahindra Bank, SIS, Tata Consumer

Thursday: Adani Transmission, CAMS, Dabur, CEAT, Marico, TVS Engine

Friday: Federal Bank, Reliance Industries, Tata Power

Saturday: Navin Fluorine

The initial public offer (IPO) of Life Insurance Corporation (LIC) will also open from May 4 for subscription. The government will be selling Rs 20,557 crore worth of shares in the IPO. Considering the mammoth issue size, the IPO is expected to test investors’ appetite and the liquidity routed towards the IPO can mildly influence secondary markets.

FOMC meet
US Fed will decide on its monetary policy in the coming week. Markets are discounting a 50 bps rate hike this time and the focus would be on their commentary on the quantum of rate hikes ahead. If there is any deviation in the quantum of rates, the market will react accordingly.

auto sales dating
Auto companies will start reporting their April sales data from today onwards that will have a bearing on the sector in coming days. When the market opens on Monday, we can expect movements in specific stocks.

Wedding bells sounding across the country and higher rural income are helping two-wheeler makers regain their mojo and recover sales during April, analysts tracking the auto sector said. Sales in the passenger vehicle segment are also likely to be better.

Macro dating
Traders will also react to a host of macro data that will be released during the week. This includes PMI data, export-import preliminary data and loan and deposit growth data.

technical outlook
Nifty50 has been consolidating for two weeks in the range of 16,900 to 17,350. A crucial support zone has been established around 16,800 levels and the benchmark has managed to bounce back multiple times from this level.

“On the weekly chart, while Nifty formed a doji candlestick pattern last week, an inverted hammer has formed this week. This is a bullish indication as the pattern suggests that a bottom is likely to be in place and we may see a trend reversal going forward. Therefore, we recommend that traders maintain a bullish stance on the index for the next couple of weeks with a target of 18,000,” said Yesha Shah, Head of Equity Research, Samco Securities.


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