Q1, derivatives expiry to guide equity markets

Mumbai, July 23: Ongoing quarterly results, along with derivatives expiry and global cues will guide the key equity markets during the upcoming week, market observers said. Alysts pointed out that the Parliament’s monsoon session, as well as the direction of foreign funds’ flow will be the other major themes for the upcoming week. “Markets will continue to be influenced by stock-specific news and corporate action such as buy-backs. Earnings too will be at the centre stage,” Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS. “The global risks emating from the US political turmoil can influence the domestic market sentiments too.” According to Vinod ir, Head of Research, Geojit Fincial Services, the quarterly earnings growth may not match the current premium valuation due to a tepid start to the results season. “Currently, investors are giving more weight to the prevailing positive macros which are maintaining a positive vibe in the market,” ir explained. “However, there is a chance of consolidation in the near-term due to ongoing quarter results; US Fed’s policy and OPEC meet next week.”

Companies like ICICI Bank, HDFC Bank, Axis Bank, HDFC, HCL Tech, Yes Bank, Maruti Suzuki, ONGC, Hero Motocorp and Dr Reddy’s Lab are expected to announce their quarterly results in the coming trade week. “Telecom will be a sector to watch out for in the coming weeks on their reaction and response on how to tackle the new challenge posed from JioPhone,” Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS. Apart from quarterly results, US Federal Reserve’s policy review on July 26, followed a day later by the domestic equity market’s derivatives expiry will influence investors. On the currency front, the Indian rupee strengthened by 21 paise to 64.32 against the US dollar from its last week’s close at 64.53 to a greenback. “We continue to expect RBI to keep buying US dollars every time USD/INR comes to closer to 64 levels,” said Anindya Banerjee, AVP, currency derivatives, at Kotak Securities. “Though RBI may not be looking to peg the rupee to a particular level against the USD — they are definitely targeting volatility.”

On technical levels, the NSE Nifty is expected to touch new highs after crossing the immediate resistance level of 9,928 points. “Technically, the underlying trend remains up and the coming week could see the Nifty attempting to move to new life highs,” Deepak Jasani, Head - Retail Research, HDFC Securities, told IANS. “Immediate resistances are at 9,928 points while crucial supports to watch for any weakness are at 9,792 points.” Last week, key equity indices closed on a flat-to-positive note on the back of positive quarterly results and fresh inflows of foreign funds. Consequently, the 30-scrip Sensitive Index (Sensex) of the BSE inched up to 32,028.89 from its previous week’s close.

Similarly, the NSE Nifty rose by just 28.9 points to close the week’s trade at 9,915.25 points. “Stocks climbed for a third time this week after a share buy-back from Wipro and better-than-expected profit from Reliance Industries pushed equity benchmarks higher,” Nevgi of Zyfin Advisors said. “Nifty maged to close above the 9,900-mark, despite all the volatility which took place throughout the week.” (IANS)