War, inflation & Q4 numbers among key factors that may guide market this week

However, RBI’s accommodative stance and merger of HDFC twins supported the market sentiments as BSE Sensex and Nifty 50 settled in green. Midcap and smallcap indices advanced 4 per cent each.

“Market was cautious during the last 2-3 days ahead of the RBI meeting and its future policy stance. Measures being in-line with market expectations led to a relief rally, said Vinod Nair, Head of Research at Geojit Financial Services.

“The focus has shifted to the Q4 earnings season, initiated by the IT and banking sector. Outlook for the banking sector is robust due to rapid bounce in credit growth and improvement in balance sheet while preview for IT is mixed as Q4 is seasonally weak,” he added.

In the coming week, March quarter earnings, the Russia-Ukraine crisis, rising inflation numbers and crude prices will be key areas to focus on for the investors, despite merely three trading sessions during the period.

Below are key factors that may steer markets next week:

War Crisis

It has been more than six weeks of war between Russia and Ukraine, which is hurting the market sentiments globally. Despite some signs of de-escalation, the actual intensity has not muted much. The strikes from the Russian forces are leading to massive destruction in major cities of Ukraine.

India’s inflation numbers

India will report its wholesale and consumer inflation numbers for March 2022 on Tuesday, March 12. The CPI print in India will be an important domestic indicator to keep an eye on. A higher-than-expected jump in inflation might provoke knee-jerk reactions.

The inflation numbers are expected to remain high after the Reserve Bank of India sharply raised the inflation forecast to 5.7 per cent from 4.5 per cent earlier, citing geopolitical worries between Russia and Ukraine.

Q4 earnings

India Inc will start announcing their March quarter earnings this week with the IT behemoth Tata Consultancy Services (TCS) releasing its numbers on April 11 and then Infosys on April 13.

Other companies including Alok Industries, Birla Tyres, Delta Corp, Anand Rathi Wealth are slated to release their Q4 earnings this week.


FII flows

Despite the emergence of some positive signs for some period, foreign investors continue to withdraw money from Indian equities as the US dollar has remained strong. Though, if FIIs returns to the bourses with all guns blazing, the market may zoom further.

Two Listings

The truncated week will observe listing of two companies on the bourses next week. Veranda Learnings Solutions will make its debut on Monday, April 11 whereas Hariom Pipe Industries will be listed on exchanges on April 13.

Crude oil prices

Crude oil has eased down lately but it still maintains above $100 per barrel. The continuously high price is the biggest threat to the economy and margins of companies that use it as a raw material for their product and services. Market will keep an eye on how the prices pan out further during the week. Any further rise in prices will be negative.

Technical Outlook

While the Nifty 50 index ended the week positively, higher selling pressure was witnessed near 18,100 levels which led to a reversal of momentum. On the weekly chart, the index formed a shooting star candlestick pattern which suggests that there can be a short-term weakness in the market, said Yesha Shah, Head of Equity Research, Samco Securities.

“The immediate support and resistance for the benchmark are now placed at 17,600 and 18,100 levels. Any break below the support will need a re-examination of the bullish bias,” she added.