Inflation data, earnings, Adani developments among 7 factors to drive D-Street this week

While the Adani fiasco will remain on the radar for investors, the earnings season is drawing to a close, and therefore, there aren’t significant triggers on the home front.

Global markets and economic data will also lend cues to domestic equities in the coming week.

“We have certainly weathered the storm, and the market has digested most of the pain from the recent fiasco. Now since we are trading around the crucial juncture, the market is awaiting some solid trigger to come off the recent slumber phase,” said Sameet Chavan, chief analyst – of technical and derivatives at Angel One.

Adani Fiasco
Despite several assurances by the Adani Group, investor confidence is yet to come back and bring about a relief rally for the stocks.

In what may be called a temporary relief, the National Stock Exchange on Friday removed and and Special Economic Zone from the additional surveillance framework.

Earlier this month, the exchange had placed the 2 Adani group stocks and under additional surveillance measures to curb excessive volatility.

But good times seem farsighted for billionaire Gautam Adani, and fresh developments will be closely monitored. After market hours Friday, Moody’s Investors Service announced its decision to cut the outlook on 4 of Adani Group companies, including , to “negative” from “stable”.

Meanwhile, SBICap Trustee on Friday said that Adani Ports and Special Economic Zone,

, and Adani Green Energy had pledged shares with the firm.

On Tuesday, Adani’s flagship company Adani Enterprises will report earnings, and analysts will seek several clarifications from the management.

Macroeconomic data
The crucial consumer inflation data, both in the US and India, will be released next week. India will release the numbers on Monday, and the US on Tuesday.

After easing to a 12-month low in December, India’s consumer price index-based inflation has likely inched up in January. CPI is seen touching a 3-month high of 6%, but this is mainly due to a low base of last year.

The Street would want to see if inflation eases further in the US in January as it will give some clue on the possible rate action by the Federal Reserve in the coming months. Besides India and the US, the UK will also release its consumer price inflation print.

Data on India’s trade balance, US retail sales, and US jobless claims are also in the line-up next week.

Earnings
Corporate earnings draw to a close, and some of the major companies releasing numbers include 5 Nifty 50 majors – Adani Enterprises, Oil and Natural Gas Corp,

, , , all of which will come on Tuesday.

Apart from these, FSN E-Commerce, Indian Railways Finance Corp,

, , NMDC, and are the other big companies releasing earnings next week.
On the global front, Kubota, Restaurant Brands INT, Air BNB, Coca-Cola, Kraft Heinz, Cisco Systems, and are some of the big ones to announce earnings.

Global Markets
In the absence of any major significant domestic triggers, global markets will lend cues for trade in the coming week.

The start of the year for Indian equities has not been on a good note, as foreign funds are moving to other emerging markets given the attractive valuations.

Benchmark indices in China, Hong Kong, Japan, South Korea and Taiwan have gained over 5-10% so far in 2023, whereas India has given negative returns of a little over 1%.

Corporate Action
Shares of

will trade adjusting for the special dividend of Rs 11 a share on Monday. Similarly, shares will trade ex-date for the special dividend of Rs 67 a share. & Gamble Hygiene shares will trade ex-date for the interim dividend of Rs 45 a share.

FII flows
Since the start of the year, Indian equities have witnessed consistent outflows from foreign investors, with the net outflows touching a 5-month high at over Rs 6,000 crore in January.
In February so far, they have net sold equities worth a little over Rs 5,000 crore.

Given some crucial data points like inflation expected in the US and India, flows from FIIs will be closely tracked.

Technical indicators
The Nifty 50 ended flat in the week ended February 10, amid the volatility in both Adani Group stocks – Adani Enterprises and Adani Ports and Special Economic Zone. The index ended 0.2% down at 17856.50 points.

The trading in the options of the 50-stock index suggests that an upside could remain restricted in the week ahead.

Open interest remains the highest in the 17800 put option and 18000 call option, suggesting that to be a trading range at least for the initial part of the week.

After witnessing a rangebound price action throughout the week, the index has formed a minor candle within its previous week’s range, says Rohan Patil, technical analyst at SAMCO Securities.

In the coming week, 17600 will be sacrosanct support for the index, while 18000 could be an immediate hurdle. If the index decisively surpasses the 18000 level, then a fresh round of buying could be seen that will push the Nifty 50 towards the 18250 level, Patil said.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)