Government’s economic package announcement, diminishing rate of domestic infection and progress in vaccination, in spite of rapid increase of Covid cases globally, swayed the domestic market last week.
Many of these factors will also impact the market next week. Covid cases and vaccination will be tracked by investors. Meanwhile, IPO mart will see two new issues, which will keep the primary market in the spotlight.
“Large and mid cap IT companies will remain in focus the next week as Q1FY22 result season commences in India. Investors are therefore advised to look for any short pullbacks post earnings as an opportunity to enter the IT sector,” said Nirali Shah, Head of Equity Research, Samco Securities.
Here are key factors that will steer the market next week:
Q1 earnings: The first quarter earnings season will formally begin with a few companies scheduled to announce their numbers. This includes names like Avenue Supermart, Indocity Infotech, Delta Corps and
USA’s IT services companies registered exemplary earnings performance with upward revision in their outlook propelled by strong tailwinds. Hence, in a similar fashion, IT stocks in India have been witnessing a strong push over healthy earnings expectations, said analysts.
PMI data: Investors will keep a close eye on Markit Services PMI and Markit Composite PMI data for June, which if worse than expected may trigger a selloff. espite easing restrictions, the manufacturing PMI data for June contracted to 48.1 from 50.8 in the previous month.
Two primary issues: In the second half of the week, IPO mart will be in focus as two issues–GR Infraprojects and Clean Science Technology–will open for public subscription. Grey market premium for these issues suggest there is good demand for the shares among the investors.
Covid cases: Some Southeast Aisan countries are dealing with the worst outbreak of the pandemic, which is taking a toll on the market. Australia has also seen the spread of a highly contagious Delta variant leading to a lockdown in some of the biggest cities. If these curbs are not lifted, global market may remain subdued.
Nifty50 index closed negative and remained in red throughout the week, but still it has gone nowhere. In fact, the index is finding strong demand around 15,600 and trading in line with other emerging market indices.
“As long as we are trading above the current support which seems a more likely scenario, traders are advised to maintain a cautiously bullish bias and can initiate long positions around the support while keeping a stoploss just below 15,560. The immediate resistance is now placed at 15,900,” said Shah.