Market next week: Global cues, macro numbers, last batch of earnings to dictate D-Street in holiday-truncated week: Experts

The market extended gains for the third straight week as benchmarks Nifty50 and Sensex ended higher by 1.4% each for the week ended on August 5, 2022. IT stocks led the rally this week with Nifty IT gaining 2.8% and S&P BSE Teck closing higher by 3.1% in the five-day trading session. Firm global cues throughout the week and FIIs buying were other major triggers that helped the Indian stock market closing strong in the week gone by.  

As we enter the holiday-truncated week, the experts were of the view that Global cues, Macro numbers, and the last batch of earnings will be key factors that will decide how the market behaves in the week, starting July 8. The market (NSE and BSE) will remain closed on Tuesday, August 9, on account of Muharram holiday. The NSE and BSE will also see no action on August 15, when India celebrates its 75th Independence Day and the market on August 31 due to Ganesh Chaturthi.  

It was the third straight week of gain for the Indian equity markets thanks to continuous buying by FIIs, however, volatility has jumped at higher levels as the market is a little overbought in the short term, while indices are near important resistance levels, and some geopolitical concerns are also there, said Santosh Meena, Head of Research, Swastika Investmart Ltd. 

"This week market will deal with the last batch of Q1 earnings, where the Market will react to SBI, HPCL and BPCL results on Monday, while Adani Ports, Bharti Airtel, Powergrid, Coal India, Eicher Motors, Hindalco, Grasim, Heromotocorp, LIC, ONGC, Bata India and Aurobindo pharma will be other prominent earnings next week. Global cues will be important as geopolitical concerns are rising, whereas both domestic and global macro numbers will play an important role," said Meena. 

India will announce its CPI and IIP numbers on August 12, while the US inflation numbers are scheduled on August 10. 

Technically, the Nifty is trading near the critical supply zone of 17400-17700, where we can expect a profit booking, said Swastika Investmart Head of Research. However, if Nifty manages to take out the 17700 level, then a move towards 18000 can't be ruled out, he said 

"On the downside, 17200 is an immediate support level then 200-DMA of 17000 is the next support while 16640 is a critical support level to take fresh long positions," he added. 

As per Ajit Mishra, VP - Research, Religare Broking Ltd, markets managed to end higher for the third successive week, mainly led by firm global cues.  

"On the domestic front, auto sales data, favourable data of foreign inflows and MPC’s inline action on rates kept the tone positive in between. While a mixed trend across heavyweights capped the upside in the index, rotational buying kept the traders busy.  

The coming week is a holiday-shortened one and participants will be closely eyeing global markets and domestic factors viz. earnings and macroeconomic data for cues, said the expert.  

"Further escalation of China-Taiwan tension may result in volatile swings. On the data front, we have IIP and CPI inflation scheduled this week," he added.