stock market outlook: Q1 earnings, rupee, monsoon session among key factors that may guide markets this week

stock market outlook: Q1 earnings, rupee, monsoon session among key factors that may guide markets this week

Domestic benchmark indices witnessed a dismal trade during the week amid a record low rupee, a mixed set of quarterly earnings, and fears the US Fed is set to hike policy rates aggressively after a higher-than-expected inflation print.

The 30-pack BSE Sensex tanked 721.06 points or 1.32% to 53,760.78 during the week ended July 15, 2022, and the Nifty slipped 171.40 or 1.06% to 16,049.20.

Markets extended losses after a private report lowered India’s gross domestic product growth projection for 2023 by 70 basis points from 5.4% to 4.7% citing headwinds to economic recovery.

TCS’ June quarter numbers were a miss on margin, profit and dollar revenue growth, even as the management commentary suggested demand visibility for FY23 remains intact. A few analysts have cut FY23 and FY24 earning estimates for TCS by 1-4 per cent and suggested a price target for the stock in a wide range of Rs 3,200-5,000.

The Indian rupee fell for five consecutive days and touched a new record low of 79.96 against the US dollar on Friday as investors chose to stay away from riskier assets.

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“Rupee depreciation is in line with all emerging market currencies. The Indian rupee has its eyes set on the 81 to the dollar mark in the near term,” says Sugandha Sachdeva, Vice President – Commodity and Currency Research, at Broking Ltd.

In the forthcoming week, investors would first react to the results of , , Nelco, , , , , , , L&T Finance Holdings, CEAT, , Wipro, , Cyient, PVR, , , among others.

The Monsoon Session of Parliament will begin on July 18, 2022 and will go on till August 12, 2022 will also grab traders’ attention. Apart from important Bills and discussions, this session holds a lot of importance given the fact that both the election of the President of India and the Vice President of India will take place during the session.

On the economic front, traders will be eyeing the consumer price index data scheduled to be announced on July 20. Traders will also keep an eye on the foreign exchange reserves which are scheduled to be released on July 22. Foreign exchange reserves in India decreased to $588.31 billion on July 1 from $593.32 billion in the previous week.

“As concerns of growing inflation and recession hang over the global economy, Indian benchmark indices are projected to remain uncertain in the near term. In this context, investors are anticipated to keep a close watch on the currency market, as the USD/INR has reached a new all-time low,” said Apurva Sheth, Head of Market Perspectives, Samco Securities.

Vinod Nair, Head of Research at

said that volatility has re-emerged and investors have turned their focus on upcoming Fed policy in the backdrop of heightened US inflation.

“Fall in crude prices and reduction in FII selling added optimism to the domestic market while gloomy IT results, depreciating rupee and fear of global recession are restricting sizable up move,” he added.

“Nifty is hovering near the 100% extension of the previous move. In addition, we have 78.6% retracement of the previous fall at 16450 mark and that is accompanied with the placement of Span A hurdle of Ichimoku. Thus, for the coming week we do not expect a one sided move in the market and we continue to remain cautious,” said Mehul Kothari – AVP, Technical Research, Anand Rathi Shares & Stock Brokers.

“A move above 16275 might help the index move towards 16450 but we need to check whether the index sustains there or not. We would advise traders to keep booking short term profits at higher levels. On the downside, 15850 would be an important support for short term and a breach of the same might bring in nervousness back to our markets,” he added.

“The 16,000 mark is crucial not just from a sentimental or psychological point of view. It is also a very crucial support level as it is the 50-day DMA (daily moving average) of Nifty. The long-term and the medium-term outlook of the market would be positive till the time it is above 16,000. A breach below that level would give bearish signals,” Kranthi Bathini of WealthMills Securities told ETMarkets.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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