InvestorQ : What in your view are the major stock market cues for the Diwali Week starting on 24th October 2022?
sarah Leo made post

What in your view are the major stock market cues for the Diwali Week starting on 24th October 2022?

diksha shah answered.
2 months ago

Here are some important stock market cues to look out for in the current week, that could have an impact on the direction of the markets.

a) Nifty closed the previous week up +2.27% as markets started betting on less hawkishness by central banks to avoid recession. However, the mid-cap index was just up +0.55% for the week and small cap up +1.42% as they were less in favour compared to the large caps. That large cap bias is likely to continue even in the coming week.

b) Now about quarterly results. Firstly, the markets are likely to react to weekend results. The reaction would be positive for ICICI Bank and Kotak but cautious for Reliance. For the coming week, major large cap results include Dabur India, Gland Pharma, SBI Card, Maruti, Reddy Labs, Vedanta and Indian Oil Corp. Among key mid cap results are Tata Chemicals, Raymond, MRPL, Blue Dart, Century, Chennai Petro and TMB.

c) Brent crude has been hovering above $92/bbl. While the recession fears are still there, the supply cut by OPEC and falling inventories are likely to hold oil prices at elevated levels this week. Not to forget that FPIs pulled out Rs5,992 crore from equities in the last week, so the pressure on the Indian rupee is likely to continue.

d) Geopolitical risk of the Ukraine war and the ongoing political tussle in UK will be dominant in the coming week. With no IPOs scheduled for this week, focus will be on the post-listing show of Delhivery. The stock has lost 31% in the last 2 days to touch lowest since listing and that has been driven by weak business guidance.

e) With the forex reserves falling to $528 billion, (nearly $120 billion below peak levels), the rupee is likely to take support at 83/$, although the rupee can be expected to weaken further to around the 84/$ mark. That would mean very limited and measured intervention by the RBI in the coming week.

f) It will be a truncated week with Monday seeing brief Muhurat trading and markets shut on Wednesday. That would keep the Nifty in a narrow range of 17,400 to 17,900 band for the week. However, with the VIX sharply lower at the 16.5 levels, one can safely assume buy on dips in the current range.

g) Finally, there are some major global data points to watch out for. Key US data points include PMI, Yellen speak, API crude stocks, trade balance, new home sales, durable goods, GDP, jobless claims, PCE. Other global cues include EU PMI, ECB speak; Japan PMI, CPI, BOJ outlook; China GDP, IIP, Trade; UK PMI, MPC speak, industrial trends.