However, it was down 1.6 percent for the week ended April 19 partly due to FII selling and hawkish Fed comments.
In this week, the markets are expected to react to Wipro and HDFC Bank quarterly results that were announced over the weekend.
Further, given the monthly expiry of April futures and options contracts during the week ahead, volatility can't be ruled out, experts said.
He added that next week the focus would remain on the earnings season and global cues.
Here are the key factors to watch this week:Q4 earningsOn the domestic front, market participants will focus more on corporate earnings and hence, there will be more stock-specific action.
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The markets rebounded sharply on the final day of last week due to hopes that the Iran-Israel tensions may not see a major escalation, and smart recovery in the banking and financial services space. However, it was down 1.6 percent for the week ended April 19 partly due to FII selling and hawkish Fed comments. A sharp fall in technology indices following TCS and Infosys earnings announcements also weighed on the sentiment.
In this week, the markets are expected to react to Wipro and HDFC Bank quarterly results that were announced over the weekend. Overall, the benchmark indices may consolidate further with focus on the March FY24 quarterly earnings, advance quarterly estimates for US GDP, and Middle East tensions. Further, given the monthly expiry of April futures and options contracts during the week ahead, volatility can't be ruled out, experts said.
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The Nifty 50 fell 372 points last week to close at 22,147, and the BSE Sensex was down 1,157 points, at 73,088, while the Nifty Midcap 100 index fell 2.7 percent and the Smallcap 100 index declined 1.4 percent.
"The markets are likely to see volatility in a broader range on the back of divergent cues. On the negative side, geopolitical tensions in the Middle East, hawkish US Fed comments, and FII selling are making investors restless. On the positive side, expectations of healthy earnings from index heavyweights, and buying emerging at lower levels are indicating strength in the market," said Siddhartha Khemka, Head, Retail Research, Motilal Oswal Financial Services, said.
He added that next week the focus would remain on the earnings season and global cues. "Investors would also track economic data points like manufacturing and service PMI data of the US and India, US Q1 GDP numbers, and Japan’s (monetary) policy statement."
Here are the key factors to watch this week:
Q4 earnings
On the domestic front, market participants will focus more on corporate earnings and hence, there will be more stock-specific action. Nearly 160 companies will release their quarterly earnings this week, including prominent names like Reliance Industries, Tata Consumer Products, Axis Bank, Hindustan Unilever, LTIMindtree, Bajaj Finance, IndusInd Bank, Nestle India, Tech Mahindra, Bajaj Finserv, HCL Technologies, Maruti Suzuki India, ICICI Bank, SBI Life Insurance Company, and Shriram Finance, which collectively have nearly 34 percent weightage in the Nifty 50.
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Further, ICICI Prudential Life Insurance Company, ACC, Aditya Birla Money, Mahindra & Mahindra Financial Services, MCX India, Tata Elxsi, Indian Hotels, Macrotech Developers, Syngene International, Cyient, L&T Technology Services, CSB Bank, SBI Cards and Payment Services, IDFC First Bank, L&T Finance Holdings, RBL Bank, and Yes Bank will also announce their March quarter earnings this week.
US GDP
Globally, investors will focus on advance estimates of US GDP for the first quarter of CY 2024, releasing on April 25. There is an anticipation of strong US GDP data for the quarter, against 3.4 percent growth reported in Q4-2023.
Investors would also track the US and India manufacturing and services PMI flash data for April, and weekly US jobless claims numbers.
Global economic data
Further, Japan’s monetary policy statement and manufacturing and services PMI flash data for April (Japan and Europe) will also be watched by market participants. The Bank of Japan is expected to keep short-term interest rates unchanged at its next policy meeting on April 26.
Iran-Israel conflict and oil prices
The decline in oil prices below $90 a barrel seems to be indicating that there may be limited prospects of escalation in Iran-Israel tensions. But the market will keep an eye on the same and hence, there may be some volatility in oil prices in the near term.
Brent crude futures, the international oil benchmark, closed 3.5 percent down at $87.29 a barrel during the last week despite military strikes carried out by Iran and Israel on each other, after climbing up to $92.18 a barrel in the previous week. WTI crude futures closed at $83.34, down 2.7 percent for the week.
"We believe short term oil prices will remain volatile with moves in either direction based on the news, while long-term fundamentals will provide support. Any retaliation from Iran could see a rally in oil, else we expect WTI to test the support of $80 in the coming week," said Mohammed Imran, Research Analyst, Sharekhan.
Domestic economic data
On the domestic front, market participants will keep an eye on the HSBC manufacturing and services PMI flash numbers for the month of April, which will be released on April 23. In March, the manufacturing PMI came in at 59.1 and Services at 61.2, against 56.9 and 60.6, respectively, in the previous month.
Foreign exchange reserves for the week ended April 19 will be released on April 26.
FII flows
Foreign institutional investors continued with heavy selling for yet another week after elevated US bond yields and higher-than-expected US inflation dampened market sentiment. They were big sellers in technology stocks, hence, further selling may limit the market upside to some extent, though domestic institutional investors have consistently been providing great support to the market. In fact they have been buying on every dip, experts said.
FIIs net sold Rs 11,867 crore worth of stocks in the cash segment last week, taking the total monthly outflow to Rs 22,229 crore thus far in April, while DIIs net bought stocks worth Rs 12,233 crore during the week, and Rs 21,269 crore during the month. This shows that DIIs continue to compensate for the FII outflow.
Primary markets
In the mainboard segment, the Rs 649.5-crore JNK India IPO will hit Dalal Street on April 23, and close on April 25, while Vodafone Idea will close its Rs 18,000-crore follow-on public offer on April 22.
Among SMEs, Varyaa Creations will open its IPO for subscription on April 22, while the initial public offerings of Shivam Chemicals and Emmforce Autotech will open on April 23. All of them will close on April 25.
The Faalcon Concepts IPO, which will open on April 23, will also close on April 23, and the scrip will debut on the BSE SME platform on April 26. Greenhitech Ventures will list its equity shares on BSE SME on April 23, while trading in Grill Splendour Services and Ramdevbaba Solvent will commence on NSE Emerge on April 23.
Technical view
Technically, the market trend seems to have turned strong with the formation of Bullish Piercing Line and Double Bottom kind of patterns on the daily charts, which are considered to be bullish reversal patterns.
Further, the index also defended its rising support trendline on a closing basis, aligning with the psychologically significant 22,000 mark. Hence, experts expect the uptrend to extend to 22,300 in the coming sessions, and if that holds, move towards 22,500, with support at 22,000, followed by 21,900.
"Looking ahead, the next resistance level to monitor is around 22,300, with a possibility of extending to 22,500 if sustained momentum persists. Immediate support rests at 22,000," said Arvinder Singh Nanda, Senior Vice President, Master Capital Services.
The formation of a Piercing Line pattern on the daily charts further reinforces bullish sentiment, he feels. "Additionally, the indicator has breached the 55-day exponential moving average (EMA), which is at 22,067, indicating a positive short-term trend. A close above this moving average strengthens a bullish outlook," he added.
F&O cues
The monthly options data also indicated that 22,300 is expected to be next resistance area for the Nifty 50, followed by 22,500, with support at 22,000. Overall, 22,000 is expected to be key level to watch in the coming week.
Per the monthly options data, the 23,000 strike saw the maximum Call open interest, followed by 22,500 and 22,300 strikes, with meaningful Call writing at 22,500 strike, then 23,000 and 22,600 strikes. On the Put side, the maximum open interest was seen at 22,000 strike, followed by 21,000 and 21,500 strikes, with writing at 21,800 strike, then 21,900 and 21,700 strikes.
Meanwhile, the India VIX, the fear gauge, rallied 16.7 percent during the week to 13.46, but could not sustain above 14. The rising volatility made the bulls uncomfortable since the beginning of the week, but marginal cooling from 14 on Friday put them a little at ease. If the volatility declines further, the bulls may feel some more comfort.
Corporate action
Here are the key corporate actions taking place in the coming week:
Here are key corporate action taking place in the coming week:
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