Stock Market Movers - 10 Factors that may drive action on D-Street next week

The Indian markets snapped three-day losing streak to end higher on Friday. Benchmark indices Nifty50 and S&P BSE Sensex both gained 1.28% each to close above 18,000-mark and 60,500 as bulls took control of the D-Street on the last trading day of the week. Nifty ended with gains of 229 points to 18,102.75 and Sensex settle at 60,686.69 after adding 767 points.

On Sectoral front, IT shares led from the front as Nifty IT was seen gaining over 2% in a single-day trade. Tech Mahindra, Wipro and Infosys were top IT stocks to gain. However, auto and metal stocks remained under pressure throughout the day amid SIAM October auto data, heavy sell-off and volatility in the global markets.  

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Among sectoral indices, Nifty Bank also ended in green after getting stronger by 173 points to end at 38,733.35 on Friday's closing.  

The Indian markets traded on volatile note in the past week amid global cues, including CPI numbers from China. "During the week, the global markets remained highly volatile as inflation fears elevated. The week started with disappointing numbers from China, CPI rose 1.5% YoY, while the producer price index rose by 13.5% YoY owing to imported inflation and domestic supply shortages," said Vinod Nair, Head of Research at Geojit Financial Services.  

Nair said the US inflation hit a 30-year high level of 6.2% YoY adding fears for an earlier than expected rate hike. "The domestic market also followed this trend, however, the momentum regained at the end of the week due to sectors in the market which are least impacted by inflation like IT & others, and volume growth, reforms, supportive monetary policy, good quarterly earnings and strong domestic macro data points."

We have collated a list of 10 factors that will set the mood and sentiment of the market and drive action on D-street in the coming week.  
 
1. Global cues  

The global markets have been trading volatile, however, the major Wall Street indices Dow Jones, Nasdaq Composite and S&P 500—all closed with good gains on Friday. Dow Jones closed at 36,100.31, up 179.08 points or 0.50%, while Nasdaq Composite added 156.68 points or 1% to 15,860.96 and S&P also got stronger by 0.72% as it settled at 4,682.85, up 33.58 points. This comes even as the US recorded higher than expected inflation numbers. "Global markets are also trading volatile after higher-than-expected US inflation numbers however there is no panic reaction. US dollar index is trading above 95 level and US bond yields are also inching higher that could be a cause of concern," said Santosh Meena, Head of Research, Swastika Investmart Ltd.  

2. IIP and CPI numbers

The domestic investors are awaiting the release of inflation data which is expected in the coming days. CPI inflation for October is forecasted to remain close to the previous month's level of 4.35%, while WPI inflation is to show some increase from the September level of 10.66%, said Vinod Nair of Geojit Financial Services.  "On the domestic front, we will react to IIP and CPI numbers on Monday where inflation numbers are slightly higher than expectations while IIP numbers are much weaker than expectations. WPI inflation numbers will also be announced on Monday during market hours," said Santosh Meena while talking about domestic factors that may impact Indian markets in the coming week.  

3. Primary Market

The primary market is abuzz with the initial public offers (IPOs). There are many that will be listed on exchanges in the next week, while a few will also open for public subscription. "Next week is going to be IPO-heavy week where we will have a listing of Policy Bazaar and Sigachi on Monday while Paytm will debut secondary market on 18th November. Tarsons products and Go Fashion, two new IPOs will also open for subscription next week," said Meena. Besides, Rs 800-crore Sigachi Industries will also be listed on bourses on Monday, November 15.

Source: Stock Edge

4. FIIs and DIIs

The last week saw FIIs continued with selling spree, however, they returned to buying on the last day of the week to push the headline indices Nifty and Sensex close with over 1 per cent gain each. FIIs and DIIs were net buyers on Friday, November 12, 2021, with Rs 511.10 crore and Rs 851.41 crore respectively. DIIs remained bet buyers for the whole week providing some stability to the volatility in the indices. "If we talk about then data, then FIIs sold worth Rs 4900 crore, however, DIIs bought worth 5392 crore in the cash market last week.  It will be interesting to see FIIs' behavior amid the rising Dollar index and rising bond yields because they were already selling heavily in Indian markets for the last many days," said Santosh Meena. 

Source: Stock Edge

5. Technical Factors:  

Technically, Nifty was consolidating between 50 and 20-DMA but if it manages to close above 20-DMA that may lead to further strength. However, 18210-18340 is an immediate supply zone, above which, we can expect a short-covering rally towards 18500 level, said Santosh Meena. "On the downside, 18,000 will act as an immediate and strong support level. Below this, Nifty may again come under pressure, where 17,800 is the next important support level," he said

Rahul Sharma of Equity99 said Nifty 50 – after Friday`s up-move in the market, 18000 will act as a very strong support.  "On breaking this support, 17,875 will be next support and once this level is broken, we will see 17,700 levels. On the upper side, 18,200 will act as a very strong resistance and if markets break these levels, then the next strong resistance will be 18250 on breaking which 18,400 level is possible," he said.
 
6. Bank Nifty

Bank Nifty, which also bounced back on Friday with closing of 38,733.35, a gain of 173 points will also see action amid the US declaring T Bonds foreign buying. Experts put the critical support for Bank Nifty between 38,250 to 38,600. "Banking stocks will be in focus with the US declaring T Bonds foreign buying on Wednesday," said Rahul Sharma, adding that for the banking index, 38,600 will act as very strong support, on breaking which, we might see 38,300 levels.

"Bank Nifty is underperforming, however, it is trading near the critical support zone of 38500-38250, where we can expect a BounceBack. But if it slips below the 38,250 level, then it will vulnerable to major weakness. On the upside, 39,300-39,700 is an important resistance zone. Above this, 40,000-40, 200 is the next resistance zone," said Meena.

7. Corporate Actions  

The next week is also buzzing with corporate actions as Gillette India Ltd Rs 36 per share dividend ex-date is on Monday. Record date for the same is November 17. Besides, the next week will also see Balkrishna Industries Ltd Rs 4-per share finalisation, Esab India RS 22 per share dividend record date, MRF Rs 3 a share dividend ex-date, Page Industries Rs 125 per share record date and Steel Strips Wheels share split from Rs 10 to Rs 5 among other Corporate actions.

Source: SMC Gloabal Securities 

8. Holiday:

This will be a holiday-shortened week for the Indian market. The stock exchanges National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) will remain close on November 19 on account of Guru Nanak Jayanti. Earlier, the stock exchanges remained closed on November 4 and 5 on the occasion of Diwali, except for one-hour auspicious Mahurat trading on Thursday. This makes it 3 holidays this month.

9. Q2 Results & Covid 19

Though the September result season has almost ended, Rajesh Exports, Tinplate September results and others lined up next week will also have some impact on the Indian equity market.  

On all together a different front, despite daily Coronavirus cases in India has come down significantly, daily deaths may pose a threat to the market. For a second straight day, India witnessed more than 500 new Covid-19 related fatalities, as 555 more people succumbed due to the infection, taking the overall toll to 463,245, the Union ministry of health and family welfare (MoHFW) said on Saturday.

10. Rupee & Oil

Rupee rose 7 paise to close at 74.45 against the dollar on Friday as domestic equities acquired a firm momentum to help boost investor sentiments. Moreover, lower crude prices in the international market also supported the local unit, forex dealers said new agency PTI.  

Global oil benchmark, Brent crude futures fell 1.10 per cent to $81.96/barrel.  

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.01 per cent at 95.18. Oil prices fell on Friday, wiping out gains from the previous session, on worries that the U.S. Federal Reserve will accelerate plans to boost interest rates to tame inflation said a Reuters report.