
The ongoing first-quarter results of the current fiscal year (Q1FY24), local and international macroeconomic data, foreign capital inflows, and the approaching Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) are just a few of the stock market triggers that investors will be watching in the next week.
In line with encouraging global trends, the domestic equities indexes Sensex and Nifty ended Friday (August 4) with respectable gains, ending their three-day losing streak. The Nifty closed at 19,517, up 135 points or 0.70 percent, while the Sensex closed 481 points, or 0.74 percent, higher at 65,721.25.
The companies that contributed most to the advances in the Sensex index were HDFC Bank, Reliance Industries, Infosys, TCS, and Bharti Airtel. On Friday, the benchmark index outperformed the midcap and smallcap indices somewhat. The BSE Smallcap index finished 0.66 percent higher and the BSE Midcap index finished 0.65 percent higher.
The BSE Midcap index finished even for the week while the Sensex and Nifty both dipped 0.66 percent. The BSE Smallcap index saw gains of 1.51%.
The primary market is in for a busy week ahead with the release of two public issues for bidding. The central bank is scheduled to announce its decision on interest rates this week, which means it will be important from a domestic perspective as well. As a result, analysts anticipate some volatility and a wider range of market movement.
RBI MPC meeting
The rate-setting monetary policy panel will begin deliberations in the upcoming week amid predictions that the central bank will maintain the benchmark interest rates steady. The six-member MPC, presided over by RBI Governor Shaktikanta Das, will convene for three days, from August 8 to August 10, and the RBI Governor will make the announcement on August 10 at 10 a.m. The repo rate has remained constant at 6.5 percent since February of this year by the RBI. In fiscal 2023–24, this will be the third MPC meeting held by the central bank.
Rate-sensitive stocks will be the focus this week as we approach the MPC decision. As India’s retail inflation edged up last month due to an increase in vegetable prices, the market mostly anticipates the central bank to maintain its present posture.
Q1 earnings, macro data
The final batch of Q1FY24 data are scheduled to be revealed next week, which will keep investors busy reviewing corporate earnings. However, given these businesses announced their quarterly results over the weekend or during post-market hours on Friday, the markets will start the week by responding to the results for the June quarter of Britannia, Bank of Baroda, Punjab and Sind Bank, among a few others.
In the upcoming week, a number of well-known firms will release their Q1FY24 results, including Adani Ports, Apollo Hospitals, Coal India, Oil India, IRCTC, Grasim, Hero MotoCorp, LIC, Hindalco, ITC, and ONGC.
Market participants will be closely monitoring important statistics, such as the manufacturing production data, retail inflation, and industrial production data, which will be issued on August 11, 2023.
2 IPOs to hit market
Two initial public offers (IPOs) are scheduled for the main board and small- and medium-sized company (SME) divisions of the stock exchanges in the upcoming week. These are listed below:
-Subscription for TVS Supply Chain Solutions IPO will start on August 10 and end on August 14. On August 24, shares will be listed on stock exchanges.
-Subscription for the Srivari Foods and Spices Initial Public Offering will start on August 7 and end on August 9. On August 18, shares will begin trading on NSE Emerge.
On August 11, shares of Oriana Power may also be tentatively listed on NSE Emerge.
FII Inflow
In spite of weak global indications, foreign institutional investors (FII) continued to sell Indian equities for a week’s worth of sessions. Stock market confidence was negatively impacted by sharp increases in US bond yields and the US dollar. Analysts noticed that the abrupt selling by FIIs that occurred after the Nifty reached its record high at 19991 prompted a correction of more than 680 points.
Foreign portfolio investors (FPIs) also began August on a muted tone, and at the end of July, inflows were lower than in June 2023. According to National Securities Depository Ltd (NSDL) data, FPIs have sold 2,034 crore in Indian equities so far in August and invested a total of 46,618 crore in debt, hybrid, debt-VRR, and equities in July.
Analysts estimate that over the previous seven trading sessions, FPIs sold stocks worth Rs. 8,545 crore in the cash market. FPIs had purchased shares worth a total of $15,530,800 crore in Indian equities between March and July, contributing to a 14.15% increase in the Nifty 50 index.
Global Cues
Last week, Morgan Stanley downgraded China to an equal weight rating and raised India to an overweight rating because it thinks the nation is prepared for significant and sustained economic development at a time when the rest of the globe is slowing down.
The manufacturing PMI for China dropped to 49.2 in July 2023 from 50.5 in June, marking a six-month low. For the third consecutive month, the CPI in the eurozone fell from 5.5 percent in June to 5.3 percent in July 2023.
Analysts predict that in the coming week, the market will respond to changes in the dollar index, US inflation data, US initial unemployment claims, and UK GDP data.
Oil prices
After major producers Saudi Arabia and Russia extended output curbs through September, adding to fears about undersupply, oil prices increased by more than a dollar a barrel on Friday to mark a sixth straight week of gains.
The price of Brent oil futures increased by $1.10, or 1.3%, to close at $86.24 a barrel, while the price of U.S. West Texas Intermediate crude increased by $1.27, or 1.6%, to finish at $82.82 per barrel. Reuters, a news agency, reported that both benchmarks rose to their highest levels since mid-April on Friday.
Saudi Arabia has extended a voluntary 1 million barrels per day (bpd) oil output cut through the end of September, leaving room for further extension. Next month, Russia will choose to cut its oil shipments by 300,000 bpd.
“With the production cut extended, we anticipate a market deficit of more than 1.5 million barrels per day (bpd) in September, following an estimated deficit of around 2 million bpd in July and August,” UBS analysts noted in a note. According to the press news agency, UBS also stated that it anticipates Brent prices to trade in the $85 to $90 per barrel area over the upcoming months.
Corporate Action
The following week, beginning on Monday, August 7, shares of numerous corporations, including ICICI Bank, Power Grid, RITES, Bharti Airtel, Bharat Petroleum Corporation Ltd (BPCL), Castrol India, and many others, will trade ex-dividend.
Additionally, on August 8, 2023, shares of Raghav Productivity Enhancers Ltd will trade 1:1 ex-bonus. On August 11, 2023, Mena Mani Industries Ltd. stock will announce a stock split from Re 10 to Re 1.