INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Indian equities have been in a free fall since the last eight sessions on worries over US-China trade war, uncertainty over
election outcome and uninspiring March quarter earnings.
During this period benchmarks Sensex and Nifty have plunged 4 per cent each
Moreover, investors have lost over Rs 6.42 lakh crore as the overall market capitalisation of BSE-listed stocks dropped to Rs 1,46,66,587.70
crore last Friday from Rs 1,53,08,828.49 crore on April 26.
The coming week is expected to see the continuity of the bearish trend, as
look at factors that will steer market movement in the coming week:Election politics: Market is getting more and more nervous as we
approaches the end to the 7-stage general elections on May 19
The results will be out on May 23 and analysts say Dalal Street will keep experiencing bouts of volatility till then
Trade war saga: After the US raised tariffs on $200 billion worth of Chinese goods, the world is holding its breath in anticipation of
Chinese retaliation.
The two-day US-China trade talks concluded without bearing any fruit
However, hopes have not died completely as both parties agreed to talk about it in the future as well
Reuters, quoting Chinese Vice Premier Liu He, reported that China and the United States have agreed to hold more trade talks in Beijing
Each step in the positive direction will be a tonic for markets across the world.
Inflation prints: India's April retail inflation prints
will be out on Monday while the wholesale inflation numbers will be released on Tuesday
In March, the annual retail inflation rate rose to 2.86 per cent
On the other hand, wholesale price-based inflation rose for the second consecutive month to 3.18 per cent in March on costlier food and fuel
While there is the anticipation for a slight uptick in inflation prints for April, the market is hoping that it may still remain under the
RBI's target, boosting the chance for another 25 basis point trim in key rates by the country's central bank in June
March quarter earnings: HDFC, Vodafone Idea, ITC, Lupin, Bajaj Finserv, Bajaj Finance, UPL and Bajaj Auto are among the companies that will
release their March quarter results next week
The earnings numbers have been mixed and they have failed to lift market mood
Positive signals from the above-mentioned companies may give some food to the low spirited bulls.
Crude's course: As per Reuters, Brent
crude futures are holding above $70 a barrel, up 30 per cent this year
On Friday, Brent crude oil settled 0.4 per cent higher at $70.62, but posted a weekly loss of 0.3 per cent
Elevated oil prices will add to the miseries of the Indian equity market as the commodity price has a direct impact on the country's
fiscal maths and currency
Foreign money: Foreign portfolio investors (FPIs) sold Rs 1,245.14 crore worth of domestic stocks on Friday, data available with the NSE
suggested.
Trade war worries and political uncertainty have triggered an outflow in the foreign fund this month- a sharp contrast to the
trend of the last three months
In February, March and April, FIIs pumped in Rs 12,053 crore, Rs 48,751 crore and Rs 16,728 crore, respectively
However in May, as of Friday's close, they have pulled out Rs 3,217 crore, data available with NSDL showed.
If the outflow of foreign
money continues, the market may see more downside in the coming days.
Technical indicators: Nifty formed a bearish candle on the weekly
chart in the week gone by
Besides, the index has been forming lower highs and lows since the last five sessions and traded below its 50-day EMA, which indicates
weakness, said Chandan Taparia of Motilal Oswal Securities.
Mazhar Mohammad of Chartviewindia.in said in the near term, Nifty sustaining
above 11,250 level would be crucial for the bulls to prevent further damage.
