Q1 results, FII action among 10 factors to impact D-Street mood this week

Nifty ended with 1.2% gains in a week helped by gains in IT, energy, and pharma stocks. When markets resume trading on Monday, a host of important domestic and global events lined up during the holiday-truncated week are likely to impact them.

The Indian stock markets had yet another excellent week for the bulls, with the benchmark index maintaining its winning streak for the fifth consecutive week aided by broader participation along with positive global sentiment, Osho Krishan, Senior Analyst - Technical & Derivatives at Angel One said.

The bulls have shrugged off overbought conditions and propelled major key indices to unprecedented highs notwithstanding Nifty remaining technically stretched, Krishnan said as he sees no indications of the vertical rally losing steam.

"In the coming days, we anticipate the benchmark index undergoing a period of consolidation, potentially alleviating the stretched parameters. Market sentiment remains positive, with sectoral rotation contributing to a strong undertone," this analyst said.

Factors that are likely to impact movement when markets reopen this week:

1) US Markets

Major indices on Wall Street ended strongly on Friday with tech-heavy Nasdaq and benchmark S&P 500 hitting fresh record highs after weak US labor market data raised expectations for interest rate cuts as early as September.

While the Dow 30 settled at 39,375.90, up by 67.87 or 0.17%, the S&P 500 closed at 5,567.19, higher by 30.17 points or 0.54%. The Nasdaq Composite finished at 18,352.80, up by 164.46 points or 0.90%.

When Indian markets reopen on Monday, they will take cues from the Friday closing of the US markets. They will also track movement in GIFT Nifty futures on Monday. The latter is an early indicator of movement in the Nifty50.

2) Q1FY2025 earnings

The earnings season begins this week with Tata Consultancy Services (TCS) announcing its quarterly results on Thursday. The next in line will be HCL Technologies, IREDA and DMart operator Avenue Supermarts among others.

3) Rupee Vs Dollar

The Indian rupee closed nearly unchanged on Friday as importer dollar demand weighed on the currency, even though most of its Asian peers gained ahead of the release of closely watched US jobs data later in the day. The rupee ended at 83.4850 against the U.S. dollar, barely changed from its close at 83.4925 in the previous session. The currency was down 0.1% week-on-week, Reuters reported.

Major Asian currencies rose between 0.1% to 0.3% but the rupee lingered in a tight band as dollar demand from local oil companies and importers capped gains, traders said. The dollar index fell 0.2% to hit its lowest in three weeks at 104.95, pressured by strength in the euro and the British pound.

The rupee is expected to "continue trading sideways between 83.35 and 83.70," the report said, quoting Dilip Parmar, a foreign exchange research analyst at HDFC Securities.

The currency's range bound price action has also driven down near-term volatility expectations with the 1-month implied volatility dropping to 1.8%, the lowest since mid-March.

4) Corporate Action

July 8, Monday will be the ex-date and record date for AGM of Nucleus Software; It will also be the ex-date and record date for dividend of CAMS; July 9 will be ex-date for AGM/dividend of Persistent Systems and Polycab India while July 10 will be the record date; July 9 will be the ex-date and record date for DCM Shriram dividend; July 9 and 10 will be the ex-date and record date for AGM of Central Bank of India.

5) Technical Factors

On the next week Nifty and Bank Nifty outlook and how technicals stand, Ashwin Ramani, Derivatives & Technical Analyst at SAMCO Securities said that strong PUT writing was observed at the 24,200 and 24,300 strikes in Nifty and it broke its higher high pattern on the daily chart though closing above the previous day’s low.

"So, we are yet to see a lower close on the daily chart, which is a positive sign. The put writers (Bulls) have strengthened their position at the 24,300 Strike in Nifty today. The option activity at the 24,300 strike will provide cues about Nifty’s future direction in the coming session," Ramani said.

As for the Bank Nifty, it has given a lower close on the daily chart and formed a doji like candle on the daily chart. "The put writers (1.23 lakh contracts) lead the call writers (1.09 lakh contracts) at the 52,500 Strike and the option activity at this strike will provide cues about Bank Nifty’s upcoming direction," this analyst said.

6) FII / DII Action

On Friday, the foreign institutional investors (FIIs) were net buyers at Rs 1,241.33 crore while the domestic institutional investors were net sellers at Rs 1,651.36 crore.

The performance of domestic and foreign investors will have an impact on the way movement happens in the domestic stock markets.

Also Read: FPIs start July as net buyers of Indian equities, invest Rs 7,962 crore in opening week

7) IPO Action

However, there is an SME IPO of Sahaj Solar, the only one, set to open on June 11. Despite no new mainboard public offers, the Street will see listings of Emcure Pharmaceuticals and Bansal Wire, both of which have generated healthy traction among investors.

Apart from the above, three SME companies are also gearing up to list their shares on the exchanges.

Also Read: IPO Calendar: 1 IPO, 5 listings investors need to watch out for next week

8) Crude Oil

Oil prices remain critical for markets with their impact on inflation and on the rate trajectory of global central banks including India's.

Crude oil prices were trading lower on Friday with US WTI oil contracts trading at $83.44, down by $0.44 or 0.52% while Brent oil futures were hovering near $86.54, lower by $0.57 or 0.65%.

On the MCX, the July Crude Oil futures were trading at Rs 6,965 per BBL, down by Rs 59 or 0.84%.

Higher crude oil prices do not augur well for the equity markets, fuelling inflation fears.

9) Bond Yields

Indian government bond yields ended marginally lower on Friday tracking U.S. peers, while traders awaited key U.S. nonfarm payrolls data for further cues. The benchmark 10-year yield ended at 6.9926%, following its previous close at 6.9994%. The yield ended 2 basis points (bps) lower this week after rising nearly 4 bps last week.

"Index inclusion has just started, but the index flows will continue. Apart from this, the budget is a near-term trigger," Sandeep Yadav, fixed income head at DSP Mutual Fund said.


Foreign inflows have been tepid following the inclusion of Indian debt in JPMorgan's emerging market debt index last week. Foreign investors have net bought less than 50 billion rupees of debt in a week from the inclusion date, compared to earlier estimates of over 150 billion rupees.

"Possible (interest rate) cuts from the Reserve Bank of India and US Federal Reserve remain a medium-term trigger for bonds," Yadav added.

10) Global Macros

July 9: Fed Chair Jerome Powell testifies; FOMC member Bowman speaks; jobless claims data to be announced this week along with June CPI number. In the UK, MPC member Haskel speaks, RICS house price data will be announced. In the Eurozone, German exports data for May will be followed by Eurogroup meetings.

China CPI numbers for June will also be published.

Inputs from agencies

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