Market Sentiment Next Week Hinges on Q2 Earnings, Key Economic Data, and FII Flows

Alayaran.com - November 10, 2024

Mumbai: The upcoming week in the Indian stock market is poised to be influenced by a combination of domestic and global economic indicators, the final batch of Q2 earnings, and the activity of Foreign Institutional Investors (FIIs), according to market analysts.

Santosh Meena, Head of Research at Swastika Investmart Ltd, highlighted that India's Consumer Price Index (CPI) and Index of Industrial Production (IIP) data, scheduled for release on November 12, along with the Wholesale Price Index (WPI) on November 14, will play a significant role. "Globally, the US inflation report on November 13 will be critical, as it may influence the Federal Reserve’s upcoming policy decisions," Meena added.

With the major Q2 earnings from blue-chip companies already disclosed, attention will now shift towards these economic releases and the remaining corporate earnings announcements. Companies like Bank of India, BEML, Hindalco Industries, ONGC, Apollo Tyres, and Brainbees Solutions, the parent company of FirstCry, are set to declare their results this week.

The performance of US bond yields and the dollar index, which have seen a surge post the US election, will be crucial for emerging markets including India. Meena emphasized, "Given this backdrop, FIIs activity will remain a pivotal driver for the Indian equity market in the near term."

Analysts also pointed out that the movement in global oil benchmarks like Brent crude and the rupee-dollar trend will guide market directions. Palka Arora Chopra, Director at Master Capital Services Ltd, stated, "The outlook for the market will be guided by major domestic and global economic data such as India’s CPI, industrial production, manufacturing output, WPI inflation, US CPI, core CPI, initial jobless claims, UK GDP, and China's industrial production data."

The Indian market experienced a downturn last week, with the BSE benchmark falling by 237.8 points, or 0.29%, and the Nifty declining by 156.15 points, or 0.64%. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributed this weakness to continuous selling by FIIs, which has persisted into this month.

Siddhartha Khemka from Motilal Oswal Financial Services Ltd, expects markets to remain sideways due to mixed global factors and subdued quarterly results but anticipates stock-specific movements due to the ongoing Q2 earnings.

FPI Trends and Market Capitalization

The trend of foreign investments exiting the Indian equity markets has continued, with FPIs withdrawing nearly Rs 20,000 crore in the last five trading sessions, shifting allocations towards China due to higher valuations of domestic stocks. This has resulted in FPIs turning net sellers in the equity market, with total outflows reaching Rs 13,401 crore for 2024 so far.

The market capitalization of six of the top 10 most-valued firms eroded by Rs 1,55,721.12 crore last week.

Stock Market Holiday

The equity markets will remain closed on Friday, November 15, for Guru Nanak Jayanti.

(With inputs from PTI)