Weekly Outlook: 10 Factors to Move the Markets July 4-8. Read here

On Friday, Sensex closed at 52,907.93 down 111.01 points or 0.21%. Nifty 50 ended at 15,752.05 down 28.20 points or 0.18%.

Last week, Sensex and Nifty 50 fell nearly 1% each.

Yesha Shah, Head of Equity Research at Samco Securities, said: “The market is expected to remain volatile due to a host of events influencing the market. On the macro side, investors will watch the FOMC minutes to see where the economy is going. Global markets would be influenced by inflation figures from China, which are due next week. At home, the first quarter fiscal 2023 earnings season will boost market sentiment and stock-specific actions. Investors should pay close attention to management commentary and select strong company fundamentals in order to focus on the long-term picture.”

1. Earnings:

The June quarter 2022 (Q1FY23) earnings season will kick off this week with IT giant Tata Consultancy Services (TCS) announcing its financial performance for the period on July 8, followed by results from Avenue Supermarts (Dmart) July 9.

Sameer Pardikar, research analysts at ICICI Securities, said last week: “The recent correction in IT stocks could be an indication that revenue growth in FY23 could be healthy, but it could be slow from in FY24 due to a possible recession in the U.S., which could subsequently lead to reduced technology spending by some of their largest customers.In this context, LTI had issued cautious comments on the growth outlook in the fourth quarter, while other companies were still bullish on demand.We believe the growth outlook, the more color on attrition in Q1FY23 is expected to set the tone for the FY24 digits.”

2. FOMC meeting:

Investors will be watching closely the FOMC minutes due July 6 to see where the economy is heading.

Last month, the FOMC raised the target range for the federal funds rate to 1.75% – the biggest rise in 28 years. In addition, the FOMC said it would continue to reduce its holdings of Treasuries and agency debt, as well as agency mortgage-backed securities. It is firmly committed to bringing inflation back to its 2% target.

3. Operational performance for Q1:

Many automakers have announced their sales data for the first quarter of FY23 and June 2022. ICICI Direct in its note said that wholesale shipments for June 2022 have stabilized, with most segments reporting neutral to positive monthly growth. The CV space continues to follow the MoM’s secular growth trend and has outperformed the OEM pack with an encouraging double-digit recovery in the M&HCV segment. In the 2-W pack, it was a largely flat MoM performance, with Bajaj Auto being an exception, with the company seeing around 27% MoM growth, albeit on a low base (affected by issues of offer). The PV space also saw steady MoM performance with Tata Motors leading the pack. The tractor space reported muted impressions i.e. a double-digit year-on-year decline amid the wheat export ban imposed towards the end of May 2022 and the clogging of the canals in previous months.

In addition, metals companies are also announcing their operational performance data for June and the first quarter of FY23. net for the first quarter of FY23 before earnings. These sectors will be targeted and will help move the market.

4. M&O expiry:

Investors maintained a bearish stance at the start of the July derivatives run as fears of a possible recession continue to play spoilsport amid rising inflation, monetary policy tightening and rising commodity prices.

ICICI Direct in its research note said that despite the June F&O settlement, the Nifty lacked momentum and ended almost flat. Financials were the main gainers while metals, IT and autos were among the main losers. Over the past few days, the Nifty has been stuck in a range of 15700-15900. Therefore, to achieve directional movement, a pause on either side of the mentioned range would be critical.

For the July 7 expiry, ICICI Direct said to sell the Nifty 16,100 call option in the range of Target 42-44: 18 Stop-loss: 58. They said, buy Bank Nifty futures in the range of 33,500 to 33,550 Target: 33,750 to 33,850 Stop loss: 33,300.

There are currently no stocks in the F&O ban.

5. FPI Output:

In the Indian market, foreign portfolio investors (REITs) withdrew around 811 crores on July 1. REITs have been net sellers throughout the year so far. In the first half of 2022 (January-June of this year), REITs took out money to the tune of a huge 2,27,290 crore from the Indian market.

Overall, the exit of REITs from the Indian market is around 2,28,101 crores.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “REITs sell more in countries with rising current account (CAD) deficits such as India, as the currencies of these countries are vulnerable. to further depreciation. Towards the end of June, REIT sales showed a downward trend. If the market rises in July anticipating or reacting to strong first quarter results, REITs could sell again. This trend will only stop when the dollar stabilizes and US bond yields fall.

6: Crude Oil Price:

Last week on Friday, crude oil prices jumped on supply outages in Libya, a strike by oil and gas workers raising fears of a shutdown in Norway and an economic slowdown that could hurt demand weighed on feelings. Brent crude rose 2.4% and settled at $111.63 a barrel, while U.S. WTI crude jumped more than 2.5% to $108.43 a barrel.

Meanwhile, bond yields fell significantly on Friday. The 10-year Treasury yield – whose performance is measured in setting mortgage rates – slipped to 2.89% from 2.97% the previous day. The 2-year Treasury yield fell to 2.83% from 2.92%.

The Indian government last week imposed a special excise duty of 6 per liter on exports of gasoline and jet fuel (ATF) and 13 per liter on diesel exports. Major oil stocks such as ONGC, Oil India and Reliance Industries fell as new taxation signaled a tightening outlook for the energy market.

7. Geopolitical tension:

The uncertainty surrounding the Russian-Ukrainian war continues to hint at a bearish market tone for the week.

According to a Reuters report, Russia said it had taken full control of the eastern Ukrainian region of Lugansk on Sunday after capturing the last Ukrainian stronghold in the city of Lysychansk, where Kyiv said it had withdrawn. to save the lives of his troops.

However, Ukrainian President Volodymyr Zelensky denied the Kremlin’s claim to capture Lysychansk.

8. Macroeconomic data:

The United States will announce factory orders for May on July 5. In addition to the FOMC minutes, vehicle sales data for June 2022, S&P Global Services PMI, Composite PMI and ISM non-manufacturing PMI for June will also be announced on July 6. claims data will be released on July 7 and non-farm payroll data will be announced on July 8.

In the European Union, PPI data for May will be released on July 4, S&P Global Services & Composite PMI for June will be released on July 5, and S&P Global Construction PMI for June and retail sales data for May – will be released. announced July 6.

Japan will also release its PMI data on July 5 and household spending data on July 8.

China is expected to announce its PMI data for June – July 5, and inflation along with PPI data and vehicle sales will be presented on July 9.

9. Indian Rupee:

On Friday, the rupee touched a new all-time low of 79.12 before closing at 78.94 against the dollar, up 12 paise. The performance comes as the government moved to raise import duties on gold to 15% from 10.75% to curb imports.

Manish Jeloka, Co-Head of Products and Solutions, Sanctum Wealth, said: “The sale of FII in the stock markets, the rise in imports due to rising crude prices, the rise in commodity prices and the coming of importers to hedge are the contributing factors to the INR being at record highs,” adding, “for USD-INR 80 is an important psychological level. There appears to be Bank intervention central to help with a soft landing.The INR is expected to continue to outperform most other emerging market currencies.This is because most factors like rising crude and commodity prices are affecting everyone. “

10. Securities transactions:

JSW Steel and Petronet LNG shares will become ex-dividend on July 4 ahead of their record date. Companies like AstraZeneca Pharma, Axis Bank, Bank of India, GSK Pharma, DCM Shriram and Oberoi Realty have set their dividend record date for July 8, which means the stock will become ex-dividend on July 7.

The ex-dividend date, also known as the reinvestment date, is a term implying the timing of the payment of dividends on shares of publicly traded companies.

HDFC Bank and HDFC received a green signal from the stock exchanges. IndusInd Bank and Federal Bank announced their net advances and deposits data for Q1FY23.

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