Q4 earnings, election vibes, FII flows among eight factors that will steer market next week

NEW DELHI: Market trod water during the week gone by as election politics, quarterly earnings and macroeconomic indicators kept investors cautious. Even though benchmarks Sensex and Nifty logged gains in three out of five sessions, they failed to end in the positive for the week.

Sensex broke the winning streak of last seven weeks, coming off by 95 points or 0.24 per cent, while Nifty retreated 23 points, or 0.20 per cent.

Earnings will be a key theme going into the new week, truncated by two trading holiday, while macroeconomic data, political pulse and global sentiments are expected to play their part. The market will be closed on Wednesday on account of Mahavir Jayanti and on Friday for Good Friday.


Let’s take a look at key factors that can sway the market through the coming week.

India Inc’s Q4 earnings
Wipro, Reliance Industries and HDFC Bank are among the companies that will announce their fourth quarter earnings on Tuesday, Thursday and Saturday, respectively. Last week, Infosys and TCS delivered better-than-expected numbers and a continuation of this trend should help boost the morale of investors.

Macroeconomic numbers
Official data on retail inflation for March and IIP growth for February were disclosed post market hours on Friday. The wholesale inflation prints and trade balance numbers will be released on Monday. The annual retail inflation rose to 2.9 per cent against 2.6 per cent in the previous month. Industrial output growth slowed to a 20-month low of 0.1 per cent. Both are important macro indicators and may influence investor sentiment. Since the inflation numbers are still below RBI’s target, hopes of another rate cut in June can make market log gains in the coming sessions.

Minutes of RBI's MPC meeting
The MPC cut the policy rate but maintained a 'neutral' stance in April monetary policy review. Minutes of the meeting to be released this week can show what transpired behind the closed door. The market will read it for possible clue on future interest rate trajectory.

Key global macro prints
US industrial production, retail sales and manufacturing data for March and February trade balance data, along with first quarter GDP numbers and March industrial production numbers for China; March inflation numbers for euro zone and Japan's consumer price inflation data and trade balance data for March and industrial production for February are among important macro numbers that markets across the globe will read to get a sense of the health of the global economy.

Noise around election politics
The market cannot ignore it. The second phase of voting is due on Thursday and experts say the market will endure bouts of volatility till the final results come out on May 23.

Health of the rupee
Breaking its three-day winning run, the rupee closed 25 paise lower at 69.17 to the US dollar on Friday as rising crude oil prices had its impact on forex market. During the week, the domestic unit gained 6 paise. While the market will expect the rupee to be on a steady course, it may face challenges due to rising crude oil prices. A PTI report said forex dealers are worried after the Supreme Court on Friday restrained Arcelor Mittal from acquiring Essar Steel, which in turn might impact dollar flows as Essar Steel acquisition was to be worth nearly $7 billion.

Inflow of overseas portfolio money
Flow of foreign portfolio investments will remain an important factor for the market. Foreign portfolio investors (FPIs) remained net buyers in market, putting in Rs 897.45 crore on Friday, NSE data showed. In April so far, FPIs have pumped in Rs 11,742 crore, data available with NSDL showed.

Tech charts signal consolidation ahead
Last week, Nifty formed a Hammer-like pattern which, following an indecisive Doji in the previous week, suggested a loss of momentum. So, some consolidation looks possible, analysts say. Nagaraj Shetti of HDFC Securities, expects rangebound action going forward. He does not rule out a minor correction before the index sees a sharp breakout on the upside from the all-time high point of 11,761. Vaishali Parekh, senior technical analyst at Prabhudas Lilladher, says for the week Nifty will have support at 38,120 and 11,440 while it may face resistance at 39,260 and 11,800 levels.