Covid cases, Q4 numbers among key factors that will guide market this week

NEW DELHI: The domestic equity market remained choppy last week and settled almost on a flat note. Participants were worried about the rising Covid cases and increased restrictions in key states like Maharashtra and Delhi.

However, the indices managed to recoup some of their losses towards the latter half of the week thanks to dovish monetary policy and supportive global cues. Finally, Nifty closed at 14,834, down by 0.2 per cent. Sensex lost 0.3 per cent during the week.

Analysts expect volatility this week also as India Inc will start publishing their Q4 numbers. Apart from that, sharp rise in Covid cases has also put investors on edge and any adverse news on that front will not be welcomed.


“The market is expected to have a stock centric rally in the coming days which has a very broad positive view. IT and banking stocks will be in focus ahead of upcoming Q4 earnings. Banking stocks will remain on the radar as the market awaits the impact of Supreme Court judgement on banks asset quality and income recognition," said Vinod Nair, Head of Research at Geojit Financial Services.

Here are key factors that may guide market this week:

Covid cases: India's daily new Covid cases continue to rise and 1,45,384 new cases were registered in the last 24 hours, a record, raising fears of a lockdown among investors. Parts in Maharashtra and other states are already under some kind of partial lockdown to curb the spread of the virus.

Q4 earnings: Mostly IT and some BFSI companies will come out with their March quarter numbers this week, formally starting the earning season. TCS, Infosys, Wipro, Mindtree, HDFC Bank and ICICI Lombard General Insurance are among those that will release their numbers in the next six days.

Bond yields: US Treasury yields rose in the wake of a report, which provided further evidence that the world's largest economy was on a stable road to recovery from the pandemic. The dollar inched higher against a basket of world currencies as inflation data lifted bond yields. Rise in yields and dollar puts pressure on Indian equities leading to selling.

Inflation data: Indian government agencies will release wholesale and retail inflation data for March during the week, which will likely give indication on RBI’s next moves. Any uptick in the dearness level will test the tolerance level of policymakers. Besides, authorities will also publish factory output data for February.

Nifty outlook: Nifty50 index closed flat for the week after consolidating in a broader range. After testing the lower end of the channel, bulls and bears are in a strong fight for control in the short term. The market breadth has also remained mixed in the week gone by.

“Nifty is likely to break on the upside as it is already trading at the upper end of the range. Traders are advised to maintain a bullish bias while keeping a tight stoploss below the immediate support of 14,550,” said Nirali Shah, Head - Equity Research, Samco Securities.