Stock Market Movers: Top 10 factors that may drive action on D-Street next week

The Indian stock markets on Friday fell amid heavy selloff, Omicron covid variant scare and weak global cues. Domestic equity benchmarks Nifty50 and S&P BSE Sensex corrected by over one per cent each, dragged by Reliance Industries, Asian Paints and banking shares. 

The Nifty50 ended over 200 points or 1.18 per cent lower to 17,196.70 as only 12 shares advanced and 38 declined on the index. Similarly, the BSE Sensex corrected by over 750 points or 1.31% to 57,696 as only three shares were in the green and 27 ended negative on the 30-share Sensex.

"Concerns over the new Omicron variant, rising global inflation and the Fed’s remarks on early tapering continued to drive volatility in the market. Positive domestic macroeconomic data supporting economic growth helped in boosting investor sentiments during the first half of the week. However, the sentiments were reversed towards the end of the week on growing concerns over Omicron as India reported cases," said Vinod Nair, Head of Research at Geojit Financial Services. 

There will be several factors that will be driving action on the Dalal Street in the next week. We list out 10 such factors:

1. Omicron covid variant scare

This is one factor that has been causing panic not just in India, but has been pulling down markets worldwide. India's tally of Omicron variant of COVID-19 reached four after a new case was detected in Maharashtra, said news agency PTI. The Indian markets showed a knee-jerk reaction on Friday after detection of an Omicron variant case in India. 

2. RBI monetary policy meeting

The Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) is scheduled to take place from December 6 to 8, 2021. The meeting assumes significance as it comes in the backdrop of Covid omicron variant and high inflationary pressures.

"RBI’s monetary policy meeting which is scheduled to start next week will be a key market driver in the coming days as investors await MPC’s policy decision considering the uncertainty surrounding the new virus which persists in the global economy. The much-awaited decision of the MPC will be on whether they would wait for another session and evaluate the impact of Omicron to decide on a reverse repo rate hike," said analyst Nair.

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3. Primary Market (IPOs)

There are as many as four IPOs lined up to open for the next week, while Anand Rathi IPO will conclude on Monday. Four IPOs that will be opening next week are— RateGain Travel Technologies, Shriram Properties, CE Info Systems (MapmyIndia) and a Rakesh Jhunjhunwala-backed company Metro Brands. Another IPO of Jhunjhunwala-backed firm Star Health & Allied Insurance, which was subscribed barely 0.79 times, is also likely to be listed on the stock markets on December 10. 

4. Domestic data 

The November inflation data and October’s Industrial and Manufacturing Production data are also due for the next week.

"From domestic point of view, major data points awaiting its release in the coming week are November’s inflation data, which is expected to remain elevated, and October’s Industrial & Manufacturing Production data," Nair added. 

5. FIIs data

Foreign institutional investors remain net sellers so far this month. FIIs were net sellers to the tune of Rs 7,031.72 crore in the three days from December 1 to December 3. The FIIs pulled out more than Rs 1,648.79 crore from the cash segment of the Indian equity markets on Friday - December 3, 2021 - alone.

6. Global markets

The performance of US markets and the Asian markets in the coming week will also decide the mood of the domestic equity markets. All major Asian and the Wall Street indices closed in the red on the last trading day of the week on Friday amid multiple factors, including Omicron covid variant, Fed chair’s comment on the bond-buying program and US November jobs data. 

7. Winter Session of Parliament 

Around 20 Bills, including the Cryptocurrency bill, are to be introduced in the Winter Session of the Parliament that started on November 29. The session will close on December 23 and the markets will closely watch any Bill that could have direct bearing on the equity market.

8. Corporate Actions

Major corporate actions are likely to decide the sentiment of the markets on a given day as several companies' record date for dividend, bonus and share split have been planned for the next week. These are:

December 6: Coal India - Rs 9 per share ex-date is on Monday. Record date for the same is December 7.

December 7: Panchsheel Organics Ltd - The company has approved bonus share issue in the ratio of 1:1 i.e., one fully paid-up share for every one fully paid-up equity shares held. Ex-date and record date for the same is December 7. 

December 9: Shivam Autotech Ltd - The ex-date for right issue of 2 shares for every 9 shares held at Rs 18 per share is on Thursday.

9. Bharat Bond ETF April 2032

The subscription of Bharat Bond ETF, which opened on December 3, will close on December 9, 2021. Bharat Bond ETF April 2032 is a 10-year product that will mature in April 2032. The bond offers a Gross yield of 6.87% and a tentative net of tax yield at around 6.4%. Bharat Bond ETF is an Exchange Traded Fund listed on the NSE, which invests in public sector bonds. 

10. Technical Factors

The Nifty ended below 17,200, while the Sensex fell 765 points on Friday. Experts expect volatility and some correction going forward in December. Immediate support and resistance for Nifty 50 is 17000 and 17450, says Mohit Nigam, Head - PMS, Hem Securities. He puts support and resistance for Bank Nifty at 35,800 and 36,850. 

"Index closed a week at 17197 with gains of more than one percent and formed a doji sort of candle pattern on weekly chart after two bearish candles which hint indecision in the markets. Good demand zone for Nifty has already been formed near 17100-17000 & holding above the said levels, one can expect index to march towards 17500-17600 zone in near term. But if markets fail to hold them, more profit booking can push index to much lower levels, immediate hurdle is coming near 17300-17440 zone." said Rohit Singre, Senior Technical Analyst at LKP Securities.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)