Top 10 factors that are likely to dictate trend on D-Street in coming week

Indian market recorded its worst selloff since April 2021. The S&P BSE Sensex and Nifty50 fell by about 3 per cent compared to 3.5 per cent fall seen in Nifty on 12 April.

Investors lost more than Rs 7 lakh crore in a single trading session as worries over the new strain of COVID dented sentiment. The spread of the new variant has already resulted in lockdown in some countries.

Equity investors will watch out for COVID-related developments along with behavior of foreign institutional investors (FIIs) which have remained net sellers in Indian markets so far in November.

“Covid related developments will remain key triggers for the market where the market will remain keenly interested to know the efficacy ratios of various vaccines against a new variant of Covid whereas restrictions-related news across the globe will also cause volatility,” Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

“The behavior of FIIs will also play an important role in the direction of our market because they are selling relentlessly for the last many days. We are getting decent support from retail and DIIs, therefore, Midcap and Smallcap have outperformed Nifty in the month of November,” he said.

We have collated a list of 10 factors that are likely to dictate the trend in markets in the coming week:

COVID Fears & Lockdowns:

COVID fear is unlikely to go away and could weigh on markets in the coming week. Two linked cases of the new Omicron coronavirus variant have been detected in Britain connected to travel to southern Africa, Reuters reported quoting health minister Sajid Javid said on Saturday.

“Global authorities reacted with alarm to a new coronavirus variant detected in South Africa, with the EU and Britain among those tightening border controls as researchers sought to find out if the mutation was vaccine-resistant,” said a Reuters report.

After the World Health Organization (WHO) declared the new variant to be "of concern", Prime Minister Modi "highlighted the need for monitoring all international arrivals, their testing as per guidelines, with a specific focus on countries identified 'at risk'," the government said in a statement.

Media reports suggested that the Karnataka government on Saturday hinted at imposing lockdown-like measures as the coronavirus cases continued to rise at Dharwad’s Medical College.

“The markets were irked by worries over rising cases of COVID 19 (Worldwide) and fear of new variant which could be more harmful. Also, the lockdown news of few nations added fuel to the selloff,” Mehul Kothari, AVP – Technical Research at AnandRathi, said.

India GDP Data:

Investors will keep a close eye on the Q2 GDP data which will be released on November 30. In the first quarter of FY 22, the economy grew 20.1 per cent.

The country's GDP growth is likely to be around 8.1 per cent in the second quarter of the current financial year and in the range of 9.3-9.6 per cent during fiscal 2022, according to an SBI research report. Read More

Read More: India's GDP likely to grow 8.1% in Q2 FY22: SBI research report

Macro Data:

Apart from GDP data, market participants would also watch out for Manufacturing PMI data on 1 December, Services PMI data on 3 December, and Balance of Trade data for November to be released on Friday.

Winter Session of Parliament:

The government has listed as many as 26 bills for introduction in Parliament during the Winter session which will start from November 29 and close on December 23.

"The beginning of the winter session of the parliament will be in focus with 26 bills to be tabled including the Cryptocurrency bill," Ajit Mishra, VP Research, Religare Broking, said.

Auto Sales for November:

Auto stocks will be in focus in the coming week as automakers will start declaring their numbers for the month of November on 1st December.

Automobile retail sales in the country fell 18 per cent year-on-year in the 42-day long festive period this year as semiconductor shortage impacted production across companies affecting their ability to supply adequate numbers to dealer partners, said a PTI report quoting FADA in November.

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Corporate Action:

Indo US Bio-Tech Bonus on 29 November: 1 new equity share for every 5 existing fully paid equity shares

Rail Vikas Nigam on 30 November: Final Dividend 4.4% or 0.44 per share

Tiger Logistics (India) on 1 December: Interim Dividend 10% at Rs 1 per share

Apollo Pipes Bonus on 2 December:  2 new equity shares for every 1 existing fully paid equity shares

India Energy Exchange on 3 December: 2 new equity shares for every 1 existing fully paid equity shares

Sovereign Gold Bond Series:

Sovereign Gold Bond Series VIII to open from Monday. It will be available for subscription till 3 December.

The issue price for Sovereign Gold Bond Scheme 2021-22, which will open for subscription for five days from November 29, has been fixed at Rs 4,791 per gram of gold, the Reserve Bank of India said on Friday.

Read More: Sovereign Gold Bond Scheme 2021-22: Issue price fixed at Rs 4,791/gm; subscription opens Monday

Primary Market:

Star Health and Allied Insurance IPO to open on 30 November, Tuesday. The Rs 7,249-crore IPO is offering equity shares at a price band of Rs 870-900 per share.

Tega Industries IPO will open on December 1 and close on December 3. The company which is a leading producer of polymer-based mill liners has fixed a price band of Rs 443-453.

Go Fashion IPO listing:

Go Fashion IPO stock listing to happen on Tuesday which is expected to be strong. The initial public offer of the operator of women’s bottom wear brand Go Colors closed with a massive subscription on November 22.  The initial public offer (IPO) of Go Fashion India was subscribed 135.40 times on the last day. 

Against 80,79,491 shares on offer, bids were made for whooping 1,09,39,93,929 stocks on Monday. The Non-Institutional Investors (NIIs) subscribed Go Fashion IPO 262.08 times, the retail portion was booked 49.40 times and the Qualified Institutional Buyers (QIBs) subscribed to the issue 100.73 times. 

FII Selloff & Technical Factors:

Foreign institutional investors remain net sellers. They have pulled out more than Rs 31,000 crore from the cash segment of the Indian equity markets so far in November. On 26 November, when Nifty50 lost more than 500 points, FIIs were net sellers to the tune of Rs 5785 crore on a single day.

Technically, the Nifty50 is now trading below crucial support levels and is oversold; hence, a technical bounce back could be on the cards in the coming week.

“If we look at the derivative data then FIIs' long exposure in the index future stands at 59 per cent which is ok while the put-call ratio is sitting at 0.73 mark that is in oversold territory,” Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

“Technically, the Nifty has slipped below its critical support of 100-DMA that has opened the door for further weakness towards the next important support levels of 16700/16400. On the upside, we have multiple resistances in the 17100-17400 band therefore 17100-17400 area will act as a critical supply zone,” he said.

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