Indian stock market week ahead: Five factors to look for

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Shareholders and share brokers monitor the data as Sensex ended 435 points lower at 60,176.50, while Nifty lost over 0.5% to end below the 18,000 mark, at a share market, in Kolkata on Wednesday. (ANI Photo)

Volatility is expected to continue in the markets in the week beginning May 23. There are several factors that are likely to keep traders busy during the week

Gyanendra Kumar Keshri

Mumbai

Snapping five consecutive weeks of losing streak, the Indian stock markets’ key indices gained around 3 per cent during the week ended May 20.

There was extreme volatility at Dalal Street during the week. The key indices, Sensex and Nifty, started the week on a positive note and rallied around three per cent in the first two days. However, the benchmark indices tumbled by more than 2.5 per cent on Thursday. Bulls were back on Dalal Street on Friday, the last trading session of the week. The indices more than covered the losses incurred in the previous day. The Sensex and Nifty surged by around three per cent on Friday.

Rally in small firms was sharper. BSE smallcap index surged by around 4 per cent during the week outperforming the gain of around 3 per cent in the midcap index. Metal led the gains among the sectoral indices. BSE Metal index soared 7.3 per cent during the week. The capital goods index gained 5.3 per cent.

Volatility is expected to continue in the markets in the week beginning May 23. There are several factors that are likely to keep traders busy during the week.

Foreign Institutional Investors

The benchmark indices rallied around 3 per cent during the week. It was purely led by retail and domestic institutional investors. Foreign institutional investors (FIIs) were the net seller during the week. The foreign institutional investors sold equities worth Rs 11,401 crore during the week ended May 20. Since the beginning of the month, FIIs have offloaded equities worth around Rs 44,102 crore.

Domestic institutional investors have bought shares worth Rs 36,208.27 crore since the beginning of May. During the week ended May 20, the domestic institutional investors bought shares worth Rs 9,472.91 crore.

Earnings

Several big companies are scheduled to announce their financial results during the week. The companies that are scheduled to announce their Q4 results are Mahindra & Mahindra, NHPC, Oil and Natural Gas Corporation (ONGC), Bank of India, Coal India, Adani Ports and SEZ, Grasim Industries, Bank of India, GAIL (India) Ltd, Fortis Healthcare, Jindal Steel & Power, Godrej Industries and India Cements.

This will be the last leg of the earnings session for the January-March 2022 quarter. More than 1,200 companies are scheduled to announce their financial results for the January-March quarter during the week. Earnings data will have a significant impact on the market’s trend during the week.

Russia-Ukraine conflict

The ongoing Russia-Ukraine conflict has created volatility in the stock markets globally. Investors across the world are keeping eye on the conflict. It has created huge setbacks for the global economy, which was already rattled by the COVID-19 pandemic. Development in the Russia-Ukraine conflict will have a significant impact on the global equities markets as also on the other markets globally.

Global Markets

Investors closely follow the developments in the global equities. The volatility during the week was largely due to the trends in the global equities.

Major global indices including Dow Jones Industrial Average, Nasdaq 100 futures and S&P 500 futures had witnessed volatility during the week. This dampened the sentiments in the Indian equities in the middle of the week. However, the bull ruled the Dalal Street on Friday despite the weakness in the global equities.

US macro-economic data and the Federal Reserve’s action on policy rates and liquidity management are closely tracked by the investors.

Indian Rupee

The Indian rupee dipped to a new record low of 77.92 against the US dollar during the week. The rupee touched an all-time low on Thursday amid a meltdown in the equities markets.

Movement in the currency markets will be closely watched. Investors will also keep a watch on the US dollar’s exchange rate against major global currencies including China’s Yuan, Japan’s Yen, UK’s Pound Sterling and the European Union’s Euro. (ANI)

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