Global events to keep St on toes, earnings eyed

Last week, Nifty continued crawling northbound and rose for the third straight week. The index gained 1.44% closing at 10480. The midcap index gained 0.80% while smallcap index remained unchanged for the week. India's macro data showed improvement in IIP, growing at 7.1% and CPI inflation came at five months low. This helped boost the sentiment ignoring widening of fiscal deficit, and the oil price that rose to $72 due to tension in Syria.

The information technology (IT) stocks gained the most ahead of the rupee weakening and earnings season. Infosys announced inline results with the guidance of 6-8% revenue growth on Friday.

The metal stocks shined, rising 3.4%. However, the recent war that broke out between the US and Russia caused a sudden spurt in aluminium prices internationally, over the weekend.

Among losers, the public sector unit (PSU) banks lost 2.6% over the week. Foreign institutional investors (FII) sold equities worth Rs 1,654 crore while domestic institutional investors (DII) bought shares worth Rs 815 crore.

Key global events to watch this week are China announcing first-quarter GDP and industrial production data while the US industrial production data will be released on Tuesday. India's WPI will be announced today. In the corporate earnings companies like ACC, HDFC Bank, TCS, IndusInd Bank, HDFC Life and Mindtree will announce their fourth-quarter results over the week.

For the week, the Indian markets may see some ripple effect of missile attacks on Syria which may cause geopolitical tension and a further spike in oil price. However, the strong macro data and better corporate earnings growth projection will support the markets on any decline. Stock specific action in the result season is expected. Technically, Nifty has support around 10280 and 10350 levels while resistance remains at 10520 and 10600 levels. Nifty trading range could be between 10300-10550.

VOLATILITY AHEAD

• Information technology stocks gained the most ahead of the rupee weakening and earnings season
   
• Strong macro data and better corporate earnings growth projection will support the markets on any decline

The writer is VP- Retail Research, Motilal Oswal Securities Limited