Benchmark equity indices Sensex and Nifty advanced for the fifth straight week, buoyed by better-than-expected corporate earnings, firm global markets, hopes of a vaccine for Covid-19 and closed above the psychologically-important levels of 37,000 and 10,900 respectively.
The 30-share Sensex climbed 425.81 points or 1.16 per cent to 37,020.14 points in the week, while the 50-share Nifty rose 133.65 or 1.24 per cent to 10,901.70 points.
In the coming week, a host of companies are scheduled to announce their June quarter results, and will be the key factor driving the market. Direction of global markets, and progress on vaccines for new coronavirus will also be crucial for the domestic markets.
Here are a few key factors that may guide stock markets next week:
A slew of Q1 report cards: Many companies are slated to announce their June quarter earnings next week, including leading BFSI (banking, financial services and insurance) companies like ICICI Bank, Axis Bank, Bajaj Finance, ICICI Prudential Life Insurance, SBI Life Insurance and HDFC Asset Management Company.
More than the numbers for the quarter gone by, the commentary and outlook will be key.
Other key earnings to watch out for are Asian Paints, ITC, ACC, Bajaj Auto, Larsen & Toubro, Bajaj Finserv, Hindustan Unilever, Bajaj Holdings & Investment, Zee Entertainment Enterprises, Ambuja Cements and Biocon.
IndiaMART InterMESH, Bombay Dyeing Crisil, DCM Shriram, Hindustan Zinc, , Polycab, SML Isuzu, Tata Elxsi, , Skf India, JSW Steel, Schaeffler India are also slated to announce their earnings in the week.
Spread of coronavirus cases: New Covid-19 infections rose to another record high for a single day as more than 38,000 cases were reported from across the country on Saturday, while 545 more people succumbed to the virus, taking the total toll to nearly 27,000. Two days after breaching the one-million mark, India’s total Covid-19 cases stood at 10,76,861 on Saturday.
Progress on vaccine: Scientists across the world are in a race to find a vaccine to curb the spread of Covid-19 pandemic, and more than 130 vaccines are under various stages of testing across the world. In the US, Moderna is preparing to conduct the final stage of human trial by July 27. Meanwhile, Russian researchers have claimed that they will launch the first vaccine in August. The human trials being conducted by Chinese company Sinovac Biotech have reached the third stage. Back home in India, Covaxin and ZyCov-D, the two medicines that are being developed are in the first and second stage of trials.
Rossari Biotech listing: After receiving a robust response for the Rs 496-crore initial public offer (IPO), the listing of Rossari Biotech shares will be closely watched. The specialty chemicals maker’s issue was subscribed more than 79 times, and is likely to be listed on July 23. It will be the second listing in more than four months after SBI Cards IPO earlier this year.
Domestic data: Investors will watch out for foreign exchange reserves schedule to be released on July 24. Foreign Exchange Reserves in India increased to $513.25 billion on July 3 from $506.84 billion in the previous week. Meanwhile, trends in investment by foreign institutional investors and the movement of rupee against the dollar will also be closely monitored by the market participants.
Global macroeconomic data: On the global front, investors will be eyeing macro-economic reports from world’s largest economy, United States, starting with Chicago Fed National Activity Index, Redbook on July 21 followed by Jobless Claims, Kansas Fed Manufacturing Index on July 23 and finally Markit Manufacturing PMI Flash, Markit Services PMI Flash and Baker Hughes Oil Rig Count on July 24.
Technical view: Nifty50 on Friday topped 10,900 level on a closing basis and formed a bullish candle on the daily . The index had been seeing buying at lower levels, as suggested by a 'Hammer' formation in the previous session.
“ In the coming week, the market (Nifty) will reach the minimum side level of 11,050 and we expect the maximum to reach 11,200. Market support has risen from 10,400 to 10,500,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
“Bank Nifty also returned from 21,000 levels. It could hit the 22,550 or 22,900 level next week. Financial, metals, auto and pharmaceutical companies should do a better job,” he added.
