The Week Ahead on Dalal Street: Key Factors to Watch Out For

The market is expected to remain in a range with a potentially positive bias due to renewed interest from foreign institutional investors (FIIs), according to market experts. The cautious stance last week was due to the upcoming Union Budget, corporate earnings and US GDP data.

Market sentiment:

The benchmark indices, BSE Sensex and Nifty 50, saw a marginal decline of around one per cent due to a sell-off on Friday, ending the week flat but on a positive note. Despite gains earlier in the week driven by earnings from IT firms and strong FMCG results, the market was wary ahead of the Budget and disruptions from Microsoft.

Corporate Profits:

Key earnings reports from Reliance Industries, Wipro, HDFC Bank, Kotak Mahindra Bank and JSW Steel, announced after market hours, will drive market moves. Nearly 300 companies, including major players like Bajaj Finance, Hindustan Unilever, Axis Bank and Larsen & Toubro, are scheduled to report their quarterly results next week.

National economic data:

Attention will focus on HSBC’s preliminary manufacturing and services PMI data for July, as well as data on bank loan and deposit growth and foreign exchange reserves.

EU budget for 2024:

The Union Budget, to be presented on July 23, is a significant event that is expected to be pro-industrial with a focus on fiscal deficit balance, capital expenditure, social spending, job creation, Make in India initiative, green energy and rural-urban empowerment. The budget’s impact on long-term capital gains tax will also be closely watched.

US GDP and global data:

The preliminary estimates of US GDP growth in the second quarter of 2024 will be key. Other important US data include core PCE prices, durable goods orders and retail sales in June. Global PMI flashes from the US, Europe and Japan will also be monitored.

FII Activity:

FIIs have been steady buyers of Indian equities, with significant investments in technology, telecom, oil and gas, automotive, healthcare and capital goods sectors. However, domestic institutional investors have been involved in booking profits.

IPO Activity:

The SME segment will witness eight IPOs next week, including SAR Televenture, RNFI Services, VL Infraprojects, VVIP Infratech, Manglam Infra and Engineering and Chetana Education. On the main exchange, Sansar will close its public issue on July 23.

Technical view:

Nifty 50 is encountering critical support at 24,500, with major support at 24,000. Resistance levels are seen at 24,850 and 25,000. Options data indicates immediate resistance at 24,700 and support at 23,500.

Variability:

Market volatility is expected to remain high ahead of the Budget, with the India VIX rising 8% for the second consecutive week.

Corporate Activities:

Also of interest will be the key corporate actions scheduled for the coming week.

Application:

Investors are advised to exercise caution and seek expert advice before making investment decisions in light of these critical events and market conditions.

Reservation:

The views expressed by investment experts on Moneycontrol.com are personal opinions. Moneycontrol.com recommends consulting certified experts before making any investment decisions.