NEW DELHI: After months of indecisiveness and dullness, barring some intermittent sparks, the bulls put up a brilliant show during the week gone by.
Buoyed by a sharp drop in crude oil prices, a recovery in the rupee and earnings optimism, domestic equities scaled record highs during the week.
On a weekly basis, the S&P BSE Sensex gained 2.47 per cent while the broader Nifty50 index of the National Stock Exchange (NSE) shut shop with 2.28 per cent gains.
Going forward, June quarter earnings, macro data and geopolitical developments will continue to influence investor sentiment.
Here's a lowdown on the key factors that are likely to steer market in the coming week –
June quarter earnings
An action-packed week awaits on the earnings front, as several big names are scheduled to announce their Q1 numbers. FMCG major Hindustan Unilever (HUL) is slated to release its results on Monday, July 16, while Zee, Crisil and Ashok Leyland will announce theirs on Tuesday, July 17. Bandhan Bank, JK Tyre, Mindtree, RCom and Ultratech Cement are expected to declare earnings on Wednesday, July 18. Bajaj Finserv, Bajaj Finance and Kotak Mahindra Bank will announce their numbers on Thursday, July 19. Wipro, Bajaj Auto, MCX and HDFC Standard Life Insurance Company will release theirs on Friday, July 20.
On the macro front, the government will announce wholesale price inflation (WPI) for June 2018 on Monday, July 16. Wholesale inflation accelerated to a 14-month high in May, driven by a broad-based increase in prices that had spilled over to the retail level as well. WPI rose by 4.43 per cent YoY in May 2018, compared with 3.18 per cent in April and 2.26 per cent a year earlier.
PC Jewellers will remain in focus when trading resumes on Monday after the company on Friday withdrew a May 10 proposal wherein it had announced a plan to buy back shares worth Rs 424 crore from shareholders. Aurobindo Pharma on Saturday said it had signed a definitive agreement to acquire Apotex's businesses in Czech Republic, Poland, Spain, Belgium and the Netherlands for 74 million euro.
This apart, Dr Reddy's Laboratories would be in focus after the New Jersey District Court granted a preliminary injunction against the domestic drugmaker on sale of a generic version of Indivior's prescription medicine Suboxone in the US market.
US President Donald Trump and Russian President Vladimir Putin are scheduled to meet in Helsinki on Monday, July 16. Geopolitical analysts expect Putin to urge Trump to soften sanctions imposed over Ukraine, while Trump has said he would press Putin on everything from allegations of meddling in the 2016 US election to the war in Syria, Reuters reported.
China's GDP data for second quarter will be unveiled on Monday, July 16. The Chinese economy expanded 6.8 per cent year-on-year in the quarter ended March 2018, the same pace as in the previous two quarters. Markets will closely monitor the data as the first salvos have been exchanged in a trade war with the United States. It is expected to show growth easing very marginally to 6.7 per cent, says Reuters report.
Rupee, crude prices
Investors will keep an eye on the movement of the rupee against the US dollar and swings in crude prices.
The rupee on Friday surged to a three-week high of 68.31 before closing marginally up by four paise at 68.53 against the US currency mirroring late losses in stock markets and capital outflows. Oil prices rose on Friday but declined for the week as supply concerns eased. Earlier on Wednesday, crude prices plunged 5 per cent for its worst daily performance in over a year amid trade war tensions and reports the US could consider waivers on sanctions against Iran.
Powell's testimony on July 17
According to a report by Reuters, US Federal Reserve Chairman Jerome Powell will deliver his semiannual monetary policy report to the Senate Banking Committee on July 17. "Powells testimony will be closely watched as the Fed tries to navigate towards higher interest rates at a pace that keeps inflation under control but without going so far or fast that it slows the economy," the report said.
The Nifty50 index on Friday formed a small bearish candle on the daily chart, signalling the possibility of a near-term pause in the ongoing momentum. However, a bullish candle was clearly visible on the weekly chart with a full-fledged breakout above the eight-week consolidation zone, said Mazhar Mohammad of Chartviewindia.in. Weekly momentum oscillators such as 14-day RSI and ADX are all signalling a sharp upside momentum in the market, said Nagaraj Shetti of HDFC Securities. He sees strong resistance for Nifty50 in the 11,170-200 zone in the coming week.