RBI policy meeting, auto sales among key factors that may guide markets this week

There has been incessant selling by overseas investors, but the line-up of IPOs, which were received quite well by the markets, helped the markets sustain the positivity, said an analyst.

“The factors that have been at the core of market activity are the recent rise in virus cases indicating a probable revival in the near future, the Fed stance on monetary policy turning more foggy with higher inflation and better growth numbers, and the enhancement of Chinese regulatory oversight mainly on tech, and edutech companies, while a political and military stance against China is gaining ground gradually elsewhere,” said Joseph Thomas, Head Of Research, Emkay Wealth Management.

Some of these factors may continue to dominate the discussions in the coming weeks too, as the markets reopen for business next week.

Following are the factors that may steer the markets next week

Q1 earnings

A number of major companies will come out with their June quarter numbers during the next week that will result in stock specific actions. They include , Adani Ports, Adani Power, , , BEL, , BPCL, Cipla, Dabur, Emami, Escorts, GAIL, , HDFC, Hindalco, Vodafone Idea, Nalco, Info Edge, PNB, SBI and Tata Consumer among others.

Auto sales
From today onwards, auto companies will start publishing their July sales data that will lead to some stock specific movement from the sector. In the last couple of months, many companies have decided to hike prices, which may have an impact on the sales data.

RBI policy meet

The RBI’s MPC meeting is scheduled in the coming week, however, the expectation is that the RBI, just like the US Fed, will not hamper the repo rates so as to continue supporting impacted sectors with cheaper credit. The Governor’s comments on inflation will also throw some light onto our economy and any future actions our central bank might take.

PMI data

In the first few days of the week Purchasing Managers Index (PMI) data for services and manufacturing will throw some light on the demand conditions during the last one month. Any further contraction will indicate recovery is far from what everyone expects.

A flurry of IPOs

The next week will see four initial public offers (IPO) open for public bidding. Windlas Biotech, Devyani International, Krsnaa Diagnostics and Exxaro Tiles will together attempt to raise Rs 3,614 crirefrom primary market investors. Given the enthusiasm for recent issues, they are likely to sail through easily.

Nifty outlook

Nifty 50 index continues to trade in a tight consolidation range. Support and resistances are now placed at 15,600 and 15,900 levels. “Even though nifty has not broken the support, it is trading below the trendline drawn from April 2021 lows, which is also bearish. Traders are advised to maintain a neutral bias as long as Nifty does not break below 15,550. A break below the support is likely to trigger a short-term correction,” said Nirali Shah, Head of equity research, Samco Securities.