Domestic equities are likely to trade rangebound this week as a plethora of corporate earnings will keep the overall action stock-centric on Dalal Street.
In the week gone by, equities ended positive as dovish comments from the US Federal Reserve eased bond yields and reduced the risk-off mood in the market. Global markets will, therefore, continue to be watched for cues in early trade.
“The resilience of the global markets will be crucial in determining the sustainability of this positive momentum,” said Santosh Meena, head of research, Swastika Investmart.
On the derivatives front, FIIs short exposure in index futures is still at an elevated level of 82%; therefore, there is scope for a significant short-covering rally, Meena said.
Q2 Earnings
As the earnings near the fag end, a plethora of companies are scheduled to release their second-quarter earnings in the week ahead.
Divi’s Laboratories, FSN E-Commerce, Power Grid Corp of India, Adani Ports and SEZ, Apollo Hospitals, Bosch, Zee Entertainment Enterprises, LIC, Oil and Natural Gas Corp, Coal India, M&M, HAL, and Hindalco Industries are among the big names to watch out for.
Besides them, Varun Beverages, Bharat Forge, Hindustan Petroleum Corporation, Adani Energy Solutions, Emami, Ujjivan Financial Services, Power Grid Corp of India, Shree Cement, IRCTC, Info Edge, Apollo Tyres, Devyani International, Pidilite Industries, Power Finance Corp, Tata Power, United Spirits, Lupin, Patanjali Foods, BHEL, Mazagon Dock Shipbuilders, MCX, Nazara Technologies, Raymond, Aurobindo Pharma, Ashok Leyland, Page Industries, Aditya Birla Fashion, Lemon Tree Hotels, Car Trade Tech, SAIL, Biocon, and Glenmark Pharmaceuticals are a few other prominent companies that will be on investors’ radar.
SBI, Bank of Baroda, Delhivery, PB Fintech, Vedanta, and a few others that released earnings over the weekend, will also see their stocks being in focus on Monday.
FII Flows
The selling by foreign investors in September and October has continued in early November, too. In the first three days of November, FIIs have sold stocks worth Rs 3,063 crore in the cash market.
However, this selling trend is unlikely to continue, going forward, since the main trigger for the same was rising bond yields, which has reversed, says V K Vijayakumar, chief investment strategist, Geojit Financial Services.
FII selling is likely to be subdued, and they may even turn buyers, not to miss the rally in the Indian market, Vijayakumar said, adding that frontline banking, automobiles, capital goods, and mid-caps in IT and real estate are poised to do well.
Global Markets
Easing bond yields in the US have comforted equity investors of late and resulted in some recovery in the market. However, this will remain under watch and impact investment decisions in equities.
Global markets will continue to be tracked by investors for cues, particularly in early trade.
Macroeconomic Indicators
Globally, PMI data in Italy, France, Germany, Japan, and a few other countries will be released on Monday, which will be tracked by investors.
Weekly jobless claims in the US on November 9 will also be watched by investors.
The UK will release its GDP growth data for the September quarter on Friday, and India will release the industrial output for September.
Assembly Elections
On the political front, assembly elections in Mizoram and Chhattisgarh may be tracked by investors. Voting for 40 assembly seats in Mizoram and 20 assembly seats in Chhattisgarh will take place on November 7.
IPO Watch
While the secondary market activity will be primarily driven by corporate earnings, the primary market will also be equally active during the week.
Two mainboard IPOs of Protean eGov Technologies and ASK Automotive and two other SME issues will hit the primary market this week as companies look to cash in on the robust investor interest.
The IPO of Protean eGOV Technologies will open for subscription on Monday and close on Wednesday. The company has fixed a price band of Rs 752-792 per share, and at the upper end, it plans to raise Rs 490 crore.
ASK Automotive’s IPO will open for subscription on November 7 and close on November 9. The price band for the issue is fixed at Rs 268-282 apiece.
Apart from the new offers, markets will also see two new listings in Cello World and Mamaearth, whose IPOs have received strong responses from investors across categories.
Technical Indicators
Having settled comfortably above the 19,200 mark on Friday, the benchmark Nifty 50 has given a positive close for the week, clocking about 1% gains.
On weekly charts, the 50-stock index has formed a Bullish Inside Candle pattern and the
50-day moving average of 19,450 points now acts as a formidable resistance for the index, according to Om Mehra, technical analyst, SAMCO Securities.
“The anticipated weekly trading range is between 19,000 and 19,550, but a decisive break in either direction could alter the range-bound trend,” he said.
On Friday, the Nifty 50 ended 0.5% higherat 19230.60 points. The gains in the market saw the volatility gauge India VIX cool off and close 1.7% lower at 10.8825 points.
The weekly options chart of the Nifty 50 suggests rangebound trade, as the 19,300 call option and 19,200 put option hold the highest open interest.
