NEW DELHI: The domestic equity market started May F&O series with a bang, as the key benchmark indices logged good gains on Friday. The S&P BSE Sensex gained 256 points, or 0.74 per cent, to close at 34,970, while Nifty50 ended just shy of the crucial 10,700 mark at 10,692, up 75 points for the day.
On a weekly basis, the 30-share BSE index gained 1.6 per cent while Nifty50 added 1.2 per cent. It was a fifth straight weekly gain for the bulls.
Among key highlights, the oil-to-telecom behemoth Reliance Industries (RIL) posted its highest-ever quarterly profit at Rs 9,435 crore for March quarter, while private lender Axis Bank posted its worst quarterly earnings, a Rs 2,189 crore loss.
Maruti Suzuki disappointed Street with its lower-than-expected Q4 numbers, while telecom firm Idea Cellular reported a three-fold rise in a consolidated net loss at Rs 962.20 crore.
Going forward, quarterly earnings will continue to dominate proceedings. Lets look at the key factors that are likely to dominate the market in the holiday-truncated week. The market will be closed on May 1, Tuesday, on account of Maharashtra Day.
Next batch of quarterly results
A host of big companies will announce their March quarter numbers during the week. CEAT, DHFL, HDFC, Hindustan Zinc and Kotak Mahindra Bank are some of the notable names slated to release their numbers on Monday, April 30. FMCG firm Dabur will unveil its results on Tuesday while HCL Technologies, Hero MotoCorp, IndiGo and Tata Power will release theirs on May 2, Wednesday. Adani Ports, Adani Power, Emami, HCC, Hexaware, IIFL, L&T Finance Holdings, MRF, PNB Housing and Vedanta are scheduled to declare their score cards on Thursday, May 3. Ambuja Cements, Godrej Prop, Indian Bank, NIIT Tech, PVR and Wockhardt will announce their results on Friday.
Outcome of US Fed meet
The Federal Open Market Committee (FOMC) of US Federal Reserve is slated to meet on May 1 and 2 to decide on key interest rates. The Fed raised rates at its last meeting in March and the widespread expectation is that it will keep rates unchanged this time. The Fed is unlikely to raise rates this time around, with moves considered likely only at the June, September and December meetings, which are followed by press conferences, says a Reuters report.
Auto sales numbers
Shares of automakers will be in focus as the companies will start releasing monthly sales numbers for April 2018 starting from May 1, 2018. Major automobile manufacturers registered healthy sales figures for March 2018. Automakers such as Maruti Suzuki and Tata Motors reported steady growth with new models Swift and Nexon pushing up sales numbers last month. Commercial vehicles and tractors also made a strong showing, with the budget having pledged greater spends in infrastructure and increased support for farmers, according to an ET report.
Nifty near crucial resistance
The Nifty50 index on Friday broke its critical resistance in the 10,630-10,640 zone and in the process formed a Marubozu candle on the daily chart. This augers well for the broader market, which has been consolidating in a narrow range for some time now. Traders can expect the 50-pack to hit an initial target of 10,740, say analysts. “As the index decisively conquered the critical resistance point placed around the 10,630 level, traders can expect higher targets placed around 10,900. Minor hiccups can be encountered in the gap zone between 10,702 and 10,736 levels registered on February 5. But the supplies can easily be absorbed,” said Mazhar Mohammad at Chartviewindia.in.
If Nifty trades and close above 10,737 levels then it is likely to test 10,796, 10,856 and 10,926 levels. However, if it trades and closes below 10,647 level, then it can test 10,587, 10,528 and 10,458 levels, says Anita Gandhi, Whole Time Director at Arihant Capital Markets.
Watch out for macro data
On the macro front, the government will announce the performance of India's manufacturing sector in April 2018 on Wednesday, May 2. Manufacturing sector activity slipped to a five-month low in March as order flow lost momentum, and businesses showed little appetite for recruitment. The Nikkei India Manufacturing Purchasing Managers Index (PMI), compiled by IHS Markit, declined to 51 in March from 52.1 in February. This apart, the performance of India's services sector for April 2018 will be announced on Friday, May 4. The seasonally adjusted Nikkei India Services Business Activity Index improved from 47.8 in February to 50.3 in March, indicating that business activity stabilised during the month.
Crude oil prices
Oil prices edged lower on Friday, although Brent still gained for a third straight week amid supply concerns should the United States reimpose sanctions on Iran. Brent crude futures LCOc1 fell 10 cents, or 0.1 per cent, to settle at $74.64 a barrel. This month, the global benchmark hit highs above $75, a level last seen in late 2014, said a Reuters report. US West Texas Intermediate (WTI) crude futures fell 9 cents to settle at $68.10 a barrel, also a 0.1 per cent loss.
The surge in oil prices couldnt have come at a worse time for India, says Bloomberg in its report. "Asias No. 3 economy faces a wider trade deficit, a worsening of stretched government finances, and slower economic growth if oil prices remain stubborn at the current level. That would challenge policymakers trying to strengthen the economy in time for elections next year," the report said.
This apart, global markets trend, behaviour of foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) and rupee movement against the dollar will steer the market in the coming week.