Inflation data, trade war, earnings to keep markets busy this week

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Mumbai, Aug 12: Bulls continued to dominate Dalal Street for the third consecutive week as the Nifty and Sensex hit fresh intraday record highs of 11,495.20 and 38,076.23, respectively, in the week-ended August 10.
Inflow from foreign institutional investors, continued buying in banking and financials and in-line better-than-expected Q1 earnings boosted investor sentiment, though there is a caution in global peers due to trade tensions.
The Sensex gained 0.83 percent to close the week at 37,869.23. The Nifty rose 0.60 percent to end Friday at 11,429.50. Both benchmark indices have rallied 3.8 percent in the last three weeks.
The broader market underperformed frontliners with the BSE Midcap and Smallcap indices gaining 0.02 percent and 0.29 percent, respectively, in the passing week but outperformed in three consecutive weeks, rising 6.7 percent each. After such an upmove and given that we are at the fag end of the June quarter earnings season, which seems to have been priced in, and continued uncertainty over US-China trade war, experts expect the market to consolidate for the next few sessions before resuming its northward journey. However, they were quick to add that the long term trend remains intact.
Experts don’t see any major risk on the domestic front, adding that any sharp correction if it occurs will only be because of global reasons.
“With the index trading at a record high, some consolidation cannot be ruled out. We expect stock-specific volatility to continue with more corporate earnings scheduled in the next few sessions,” Jayant Manglik, President, Religare Broking said
Experts said market participants would keep an eye on global developments especially the US-China trade war, progress of the monsoon, macroeconomic data, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), movement of the rupee against the dollar and crude oil price trajectory.
“We continue to remain positive on market. We feel a sufficient monsoon, hike in the minimum support price and government infrastructure spending will be positive for the consumption theme,” Hemang Jani, Head – Advisory, Sharekhan by BNP Paribas said. Stock market will remain shut on Wednesday, August 15, on account of Independence Day.
Earnings
As we enter the final week of June quarter earnings season, nearly 1,800 companies will declare their quarterly earnings. Most of these will be out in the first two sessions of the week itself.
Tata Steel, Tata Chemicals, Cadila Healthcare, CARE Ratings, Godrej Industries, DHFL, Oil India, Ashoka Buildcon and Hotel Leela Venture will announce their numbers on Monday, while Sun Pharmaceutical Industries, IDBI Bank, Allahabad Bank, Grasim Industries, Indiabulls Real Estate, HDIL and Dilip Buildcon will declare results on Tuesday.
Trade war
Globally investors will continue to closely watch trade tensions between the world’s largest economies: US and China. In the week gone by, both governments announced the possibility of imposing tit-for-tat tariffs on an additional $16 billion worth of goods.
Dollar-rupee and crude movements
The rupee ended the week at 68.83 against the dollar, falling 22 paise compared to closing value of 68.61 a dollar on August 3 due to appreciation in the American currency. On Friday, it did hit 69 a dollar intraday. The fall in currency was after upside seen in previous two consecutive weeks, as renewed global currency turmoil (hit by the sudden wave of risk-off on mounting fears over a political crisis in Turkey) and worsening trade war fears worldwide rattled the forex market in a big way.