Corporate earnings, key macro data likely to drive markets this week; rupee in focus
Mumbai: Corporate earnings and macroeconomic data are likely to keep investors busy this week. The markets are also expected to react to few goods and services tax (GST) decisions taken last week. The GST Council approved implementation of the e-way bill system across the country and created necessary structural framework for anti-profiteering mechanism.
Index heavyweights which will report June quarter earnings this week include Tata Steel, Jindal Steel & Power Ltd, Tata Motors Ltd, Eicher Motors Ltd, SpiceJet Ltd, State Bank of India, Sun Pharmaceuticals Industries Ltd, Bharat Petroleum Corporation Ltd, Cipla Ltd,Steel Authority of India Ltd and Oil India Ltd.
Abnish Kumar Sudhanshu, research head at Aadya Trading & Investments Ltd, said, “We believe the coming week to remain majorly driven by the corporate earnings of big corporate as well as index of industrial production (IIP) and manufacturing data schedule in the week. We are expecting improvement in IIP data, which could further bring cheer to the market.”
Industrial output data for June will be released on Friday after market hours. May IIP was at the lowest level since November 2016. In May, India’s industrial output growth dropped to 1.7% from 3.1% in April.
Meanwhile, the rupee, which rose to a two-year high last week, will be closely watched. Strength in the domestic currency has a negative impact on export-oriented companies. Jimeet Modi, chief executive officer, SAMCO Securities, said, “Rate cut by the RBI (Reserve Bank of India) was disappointing as rupee will rally further on the back of high real interest rates in India as opposed to zero or negative real interest rate across the world. Rupee appreciation will not only impact exports but will also erode profitability of Indian companies due to cheaper landing costs of imports.”
On the technical front, the markets are expected to continue their upmove. Nagaraj Shetti, technical research analyst, HDFC Securities, said, “The underlying trend of Nifty as per smaller time-frame is slightly positive and one may expect some more upmove in Nifty up to 10140-150 levels during early-mid part of next week. The study of larger time-frame is still dicey and selling pressure is consistently emerging from near the highs of 10,150 levels.”