Q1 results, macro data, and commodity prices among 5 factors that may steer Nifty this week

NEW DELHI: On hopes that inflation might have peaked out with a fall in commodity prices, both Sensex and Nifty closed the week higher by around 3 per cent. With and DMart or Avenue Supermarts having kickstarted the Q1 earnings season, HCL and are going to release their quarterly numbers this week. Market participants will keep a keen eye on management commentaries around demand outlook, inflationary pressures and market share gains.

Besides, traders will also track global cues, commodity prices, especially crude oil, any sign of a slowdown in FII outflows and a host of macro data to be released this week.

“Apart from the US recession worries, participants should brace themselves for volatility owing to the earnings. Amid all, indications are favourable for a further rebound in the index, and the Nifty could test the 16,500 zone, while the 15,650-15,900 zone would provide the cushion, in case of any dip,” said Ajit Mishra, VP – Research,


Here’s breaking down the key factors that may guide action on Dalal Street this week:

Prices of crude oil and other commodities

Brent, the global crude oil benchmark, posted a weekly decline of 4.1 per cent and settled the week at $107 a barrel. The prices of other commodities have also been under pressure. Copper hit a 20-month low last week.

Vinod Nair, Head of Research at

, said crude prices have been falling over recessionary fears. “However, the fall has boosted the appetite for consumption, chemicals, logistics and OMCs as it will reduce the cost burden of these sectors. Falling crude prices will calm inflationary fears, reducing the burden on central banks to raise interest rates aggressively at upcoming meetings,” he said.

Q1 numbers

India’s top IT exporter

(TCS), reported a 5.2 per cent rise in its June quarter net profit and failed to meet market estimates. Radhakishan Damani’s DMart’s profit jumped six times to Rs 680 crore and managed to surprise the market. Among major companies that will announce results this week are , Bank, , , , , L&T Infotech, LTTS and and .

Global cues
In global markets, the Dow Jones Industrial Average gained 1.9% in the past week, building on its modest winning streak ahead of a key jobs report. The S&P 500 notched a four-day winning streak, matching its best stretch of the year. The latest Federal Reserve meeting minutes showed that the central bank was leaning toward another 75 basis point rate hike this month as it focuses on bringing down inflation.

This week, USA’s much-anticipated inflation numbers, Producer Price Index (PPI), and the jobless claims data will keep the global markets on their toes.

Domestic macro data
Apurva Sheth, Head of Market Perspectives, Samco Securities, said the problem is not restricted to the west. Thus the Indian inflation numbers that are set to release will keep the markets back home busy. Retail inflation eased to 7.04% in May vs 7.79% in April.

Technical factors

On the weekly charts, the Nifty has formed a long bullish candle and also surpassed the short-term resistance of 16,000. “The short-term trend of Nifty continues to be positive. Having sustained above the crucial hurdle at 16,170 levels, there is a possibility of the Nifty moving towards the next upside resistance of 16,500 levels by next week. Immediate support is placed around 16,150-16,100 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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