Macro-data, Q1 results to steer equity markets


By Rohit Vaid 

New Delhi, July 31 (IANS): Key macro-economic data, coupled with the government's efforts to build political consensus on a major economic legislation and quarterly earnings results, are expected to steer the Indian equity markets in the coming week.

"Even as earnings season continues to be a dominant theme, there will be enough distraction next week, especially on Monday when manufacturing PMI (Purchasing Managers' Index) and eight core industrial output figures will be known," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

"These macros will assume significance since RBI (Reserve Bank of India) is scheduled to announce the monetary policy on August 9."

Other market observers pointed out that investors will closely track the next batch of quarterly earnings results.

Companies like InterGlobe Aviation, Tata Communications, Voltas, HCL Technologies and Titan are expected to announce their quarterly results in the coming week.

"With the central banks' actions out of way, the markets next week will look forward to the earnings growth again as PE (price earnings) ratio of the generic indices move up," said Devendra Nevgi, Chief Executive of ZyFin Advisors.

"The global liquidity tap, thanks to global central banks, needs to be on to further support the markets, if commensurate growth in corporate earnings and other macro data does not materialise."

The net FPI (Foreign Portfolio Investors) flows in July, 2016 crossed Rs 12,600 crore, even as domestic institutional investors continued to remain net sellers.

On a weekly basis, figures from the stock exchanges showed that FPIs purchased stocks worth Rs 3,719.63 crore during the week under review.

The National Securities Depository (NSDL) data revealed that FPIs invested Rs 4,454.35 crore, or $663.05 million in equities during July 25-29.

"One needs to watch the USD movement closely too as a indicator of global risk," Nevgi said.

"Interestingly since the Brexit outcome, FPIs have net invested Rs 10,381 crore and domestic institutional investors have net sold Rs 6,688 crore up to July 28."

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, investors will closely follow updates on the GST (Goods and Services) bill in the ongoing monsoon session of parliament.

Recently, increased chances of the bill getting passed during the parliament's ongoing monsoon session enhanced investors' risk-taking appetite in the currency and equity markets.

Investors are hopeful about the bill's passage after the Union Cabinet on Wednesday approved key changes in the proposed legislation.

Government sources reported that the proposal for one per cent additional tax on inter-state sale had been dropped from the constitutional amendment bill.

The positive outcome of Finance Minister Arun Jaitley's meeting with his counterparts from the states on the issue on Tuesday also raised hopes on the bill's passage.

The pan-India tax reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where the government lacks a majority.

Desai elaborated that other important cues in the next two-three weeks will be the global markets sentiments and monsoon progress.

"Indian equity markets are likely to trade with volatility due to profit booking at higher levels in coming sessions," Desai noted.

"Aviation sector companies stocks are likely to resume upswing next week on support of lower crude oil prices." 

On sector specific basis, James added that stocks of auto and IT (information technology) companies will be in focus as market gauges the implications of rain disruptions on Gurugram and Bengaluru respectively.

Last week, positive anticipation of the GST Bill clearing parliament, supported by a perceptible inflow of foreign funds, buoyed the Indian equities markets.

The 30-scrip sensitive index (Sensex) of the BSE closed the week's trade with gains of 248.62 points or 0.89 per cent to 28,051.86 points.

Similarly, the 51-scrip Nifty of the National Stock Exchange (NSE) surged. It rose to 8,638.50 points -- up 97.30 points or 1.14 per cent.

  

Top Stories


Leave a Comment

Title: Macro-data, Q1 results to steer equity markets



You have 2000 characters left.

Disclaimer:

Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Daijiworld.com will not be responsible for any defamatory message posted under this article.

Please note that sending false messages to insult, defame, intimidate, mislead or deceive people or to intentionally cause public disorder is punishable under law. It is obligatory on Daijiworld to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using daijiworld will be purely at your own risk, and in no way will Daijiworld.com be held responsible.