Macro data, earnings to keep market busy during the week

The Nifty continues to march higher for the fifth straight week brushing aside worries of rising crude, metals, bond yields and a weak rupee. The 50-share index gained 129 points or 1.2% and closed at 10692. While the mid-cap index gained 1%, the small-cap index lost 0.5%.

Coming to the sectors, the Bank Nifty outperformed gaining 1.8% while the metal sector cooled off by 3.3%. Rally in the information technology (IT) sector halted as it corrected 0.8% post a surge in the last week. The energy sector lead from the front with a gain of 4% led by Reliance. Other sectors like pharma, auto, FMCG, private banks also gained between 1-3%.

India’s total GST collection for August 2017 to March 2018 period stood at Rs 7.19 lakh crore. The government has introduced the e-way bill mechanism for inter-state movement of goods from April 1, 2018, and the month to date collection stood at Rs 96,000 crore.

Globally, though the European Central Bank (ECB) and Bank of Japan (BoJ) kept their policy rates unchanged; UK posted the worst quarterly GDP figures since 2012 and pound corrected by 1% last week. In a major development over the weekend, South and North Korea hold peace talks for establishing peace treaty to ease military tensions on the Korean peninsula.

YES Bank delivered strong numbers, Reliance and Maruti had inline results while Shriram Transport Finance result was little weak.

The foreign institutional investors (FII) continue selling in equity markets and sold equities worth Rs 3,060 crore while the domestic institutional investors (DII) bought worth Rs 2,650 crore in the last week.

The key events to watch this week are India’s fiscal deficit and infrastructure output which will be announced today and all the automobile companies will declare their April monthly sales numbers. The US Fed meeting for interest rate decision and ADP non-farm employment will be held on Wednesday, also the US will announce the trade balance data on Thursday and the US unemployment data will be released on Friday.

In the ongoing corporate earnings season, companies like Ceat, Dewan Housing, HDFC, Dabur, HCL Tech, Hero Motocop, IndiGo, Marico, Castrol, Emami, Hexaware, MRF, Ambuja Cement, PVR, NIIT Tech, Dmart and few others will announce their fourth-quarter results this week. Most of the European and Asian markets including India will remain closed tomorrow in observance of the Labour Day.

In this short week, large-cap companies will remain in action ahead of results. Technically, Nifty is showing a bullish pattern with a higher high and higher low pattern for the fifth week. It has reached 61.8% retracement level of the entire fall from the all-time highs 11171 to the recent low of 9951 levels. Nifty has closed above 10630 level on a closing basis, on the higher side 10770 and 10850 are the next resistance levels while on the lower side 10630-10550 are the supports. For the week, the Nifty trading range could be between 10580-10850.

NO STOPPING BULLS

• Nifty has reached 61.8% retracement level of the entire fall from the all-time highs 11171 to the recent low of 9951 levels
   
• YES Bank delivered strong numbers, Reliance and Maruti had inline results while Shriram Transport Finance result was little weak

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