Vaccination, Q4 results, M&O expiration among key factors that will drive markets next week
Allaying covid fears, fluctuating global indices and strong corporate results were the factors that drove the market over the past week. Amid inflationary concerns, the minutes of the Fed meeting signaled a plausible slowdown in bond purchases “at some point,” a policy shift going forward, which will impact emerging markets. . However, this does not appear to be a concern in the short term.
“The Indian market has started to outperform the developed market which is expected to continue due to a decline in covid cases. The high cases were the reason India had little trade, but now the INR has started to appreciate. Therefore, the market will continue to focus on the covid numbers to pump more optimism into the market due to a relatively quiet week for economic data, ”said Vinod Nair, head of research at Geojit Financial Services .
Here are the main factors that could drive the market next week:
Covid-19 workload: India is reporting a comparatively smaller number of daily cases than a few weeks ago, to relieve the authorities and traders on Dalal Street. However, the country is still reporting around 2.5 lakh cases per day, which adds to the overall caseload. Deaths from the disease remain close to an all-time high.
The number of Covid-19 cases in India rose to 26,528,515 on Saturday, with 240,566 new cases. The death toll from the disease rose to 299,309 with 3,734 new deaths.
Vaccination: With the approval of the third vaccine and the opening of new centers by other states, vaccination resumed. But overall, the number of people vaccinated remains a fraction of the population. According to the latest data available, nearly 15 crore people received at least one of the required two shots.
“The entry of new vaccines to the market, which will alleviate the supply shortage and a steady decline in new cases of covid, are factors that boost investor confidence in the market,” said Nair.
Q4 profit: March quarter results have entered the final phase with a few large-cap companies and a host of small businesses scheduled to release their numbers. They include Grasim, Mahanagar Gas, Barbeque Nation, CAMS,
, BPCL, Pfizer, Dixon Tech, Eicher Motors ,,, GMM Pfaudler, M&M, Divi’s Labs and Bank of Baroda, among others.
Inflation: Rising inflation, not only in the United States but also in India, could become a source of concern for investors, as it will force central banks to raise key rates. Wholesale inflation in April hit record highs of 10.49% as high fuel costs weighed on the economy. While higher inflation is bothering the streets, its short-term impact has been offset by declining cases of covid in India.
Purchase FII: After having sold massively during the first two days, foreign institutional investors have resumed their purchases in recent days. Overall, in May, FII has consistently remained a net seller worth Rs 6,370 crore. However, domestic investors have recently been on a buying frenzy, keeping the balance tilted in favor of the bulls.
F&O expiration: Nifty and Bank Nifty’s May futures and options contracts will expire on Thursday. This may induce some volatility in the coming days as traders will rush to equalize their positions.
Technical perspectives: The Nifty50 index ended the week on a positive note and broke through the previous short term resistance of 15,050. “Although it is trading very close to its all-time highs, it is still below the ascending channel and n ‘gave no directional movement to break it yet. Nifty needs to close decisively above 15,200 to initiate a new bullish move into the channel. Until this takes a decisive direction, we maintain a lateral to slight bullish outlook, ”said Nirali Shah, head of equity research at Samco Securities.