The third week of April will be a busy one for investors amid geopolitical headwinds and election fever at home. January-March financial results for fiscal year 2023-24 (fourth quarter of 2024), 2024 general election, conflict between Israel and Iran, domestic and global macroeconomic data, oil prices, global indicators, and many more. That stock market trigger is likely to keep investors interested. This will likely guide the direction of the market this week.
Despite hitting lifetime highs, domestic stock benchmarks last week saw investors’ hopes for a June interest rate cut dashed by stronger-than-expected U.S. inflation, with strong U.S. employment and manufacturing data undercut. As a result, it has leveled off. Rising geopolitical tensions and supply concerns in the Middle East are driving up oil prices and impacting overall market sentiment.
Also read: Oil traders remain bullish as Brent hovers at $90: ‘It would be rude to stay high even as Middle East tensions cool’
Gold prices also rose due to geopolitical uncertainty, increased central bank purchases and increased demand for safe assets. As a result, emerging markets suffered price declines in the second half of the week. Conversely, European markets performed solidly, supported by the ECB’s hints that interest rates may be cut in the near term.
As for the domestic market, overseas investors are becoming cautious given the lackluster expectations for Q4 results and the premium valuations of small and medium-sized stocks. Industry consolidation continues in the IT sector after lackluster fourth-quarter earnings amid slowing spending and uncertainty over U.S. policy rates.
Vinod Nair, head of research at Geojit Financial Services, said, “With loan growth in the banking sector slowing and valuations above the long-term average, there is a profit-taking movement in bank stocks, especially PSU banks. “is remarkable.”
Also read: FPI pump INRIndian stocks $1,334.7 billion, debt flows down so far in April: Will inflows continue in FY25?
“Conversely, the auto and real estate sectors are showing resilience, supported by expectations of solid earnings momentum. Large-cap stocks are safer amid heightened volatility given their stable earnings outlook and valuations.” It is seen as a good investment,” Nair added.
Several initial public offerings (IPOs) and listings are scheduled this week across the mainboard and small and medium-sized enterprise (SME) segments of major markets. This week will be important from a domestic and technical perspective as investors focus on economic data and the latest corporate results.
Overall, analysts expect the Nifty 50 to likely fall further, although support lies around the 22,350 mark. They added that bulls can breathe a sigh of relief only once the 22,800 milestone is crossed. Experts advise traders to focus more on stock selection and favor a hedging approach.
Here are the main drivers for the stock market next week:
Domestic macroeconomic data, fourth quarter results:
On the macroeconomic front, investors will be watching India’s wholesale price index (WPI)-based inflation and trade deficit data. Analysts expect markets to remain volatile in the short term given global concerns and the first phase of elections starting this week.
The currently underway earnings season for the fourth quarter of 2024 will be a major factor driving market movements. Some major companies like Wipro, Infosys, Bajaj Auto, Mastek, HDFC Asset Management Company, Jio Financial Services, CRISIL and Angel One release their quarterly numbers. Analysts said the start of earnings season could lead to erratic fluctuations across sectors.
3 new IPOs, 2 to be listed on D-Street
In the mainboard category, Vodafone Idea FPO (VI FPO) will open for bidding on April 18, while in the SME category, Ramdevbaba Solvent IPO and Grill Splendor Services IPO or Birdy’s IPO will open for bidding on April 15 . Teerth Gopicon and DCG Cables & Wires will make his NSE SME debut on April 16th.
FII activities
Foreign portfolio investors (FPIs) have started the year on a strong note and have increased their buying flows in the Indian market so far. However, analysts have expressed concern that the impact of the India-Mauritius tax treaty will continue to cause capital inflows into the stock and bond markets in the short term.
Purchased by FPI INR1,334.7 billion worth of Indian stocks, total inflows were INR15,706 crore as on April 12, taking into account debt, hybrid, debt VRR and equity, according to National Securities Depository Ltd (NSDL) data.Total debt inflow is INR152.2 billion yen so far this month.
Foreign institutional investors (FIIs) were net sellers in four out of five sessions last week, with net outflows INR6,526.71 million, Domestic Institutional Investors (DII) were the buyers in all sessions, and the total investment amount was INR12,232.61 million, according to stock exchange data.
Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services “As a result, sentiment has weakened.” .
Global clues: Israel and Iran conflict
Iran on Saturday seized a cargo ship linked to Israeli businessman Eyal Ofer, identified as the Portuguese-flagged MSC Aries, amid growing concerns about a broader Middle East war. Indian authorities are currently in contact with Iranian authorities as 17 nationals on board the MSC Aries. Iranian state media reported that the ship was now sailing “into Tehran’s territorial waters.”
Analysts said this week will be a pivotal week for markets, with new concerns emerging about a potential conflict between Iran and Israel. A significant increase in tensions could lead to panic selling and increased volatility in global stock markets. Trends in US Treasury yields and the dollar index will be important factors influencing market sentiment.
The market is also paying attention to trends in crude oil prices, which are affected by geopolitical events. Investors will also be watching global economic data such as China’s economic growth rate, US retail sales, US manufacturing production, US new jobless claims, and quarterly financial results.
“Among other important factors, participants will be keeping an eye on global index trends, especially given the recent selloff in the U.S. market. has become support and its breakdown will add more pressure and that may be reflected in our market as well,” said Ajit Mishra, SVP, Technical Research, Religare Broking Ltd.
crude oil price
Global oil prices rose by about 1%, but energy watchdog International Energy Agency (IEA)’s bearish outlook for global oil demand and the US Federal Reserve lowered interest rates after inflation rose more than expected. It recorded a decline for the week due to concerns about delays. – Scheduled for March.
Brent crude oil futures rose 71 cents to settle at $90.45 per barrel, while U.S. West Texas Intermediate (WTI) crude oil futures rose 64 cents to close at $85.66. For the week, Brent fell 0.8% and WTI fell more than 1%.
The Organization of the Petroleum Exporting Countries (OPEC) said on Thursday that global oil demand will increase by 2.25 million barrels per day (bpd) in 2024, compared to the IEA, which revised down its forecast for global oil demand growth in 2024 to 1.2 barrels per day. did. However, during the week, oil prices neared a six-month high on fears that Iran would retaliate against an alleged attack on an Israeli military plane, sparking new geopolitical tensions in the region and raising oil prices. This could support prices.
corporate behavior
Next week, shares of some companies like Gujarat Toolroom, Stobook Industries and Schaeffler India will trade ex-dividend, while others like Surathwala Business Group Limited and Pulsar International will trade ex-dividend. It is scheduled to undergo a division. There are also other companies that have declared issuing bonuses or issuing rights.Check the complete list here
Technical view
“Nifty is trading in an expanding formation and faces a hurdle near the upper band i.e. 22,700-22,800 zone. 20DEMA) support zone is likely to be retested. Considering this scenario, traders should focus more on stock selection and prefer a hedging approach,” said Ajit Mishra of Religare Brokings. .
Nifty has formed a top candlestick pattern around the 22,800 mark on the weekly chart. As long as Nifty remains above the 20-day moving average (DMA) of 22,300, the overall bullish trend remains, said Santosh Meena, head of research at Swastika Investmart.
“A breakout of $22,750 could lead to a move towards $23,000 in the near future. Adopting a buy-and-rise strategy can be advantageous,” said Arvinder Singh Nanda, senior vice president, Master Capital Services. .
The Bank Nifty index came under heavy selling pressure, indicating a return to long-term bearish momentum. The index currently faces strong resistance at the 49,000 level, and only a decisive close above this level could revive the uptrend towards the 50,000 level. Near-term support for the index has been established at 48,000,” said Kunal Shah, Senior Technical & Derivatives Analyst, LKP Securities.
Disclaimer: The views and recommendations expressed above are those of individual analysts and brokerages and not of Mint. We recommend checking with a certified professional before making any investment decisions.
Unlock a world of benefits! From insightful newsletters to real-time inventory tracking, breaking news and personalized newsfeeds, it’s all here, just a click away. Log in here!
