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IT Earnings, Rupee, Macro Data, and Other Factors to Watch Out For

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In the past week, the Nifty once again made measured moves. It continued to strongly inherit buoyancy from the US markets that tried to stabilise. Last week, both Sensex and Nifty 50 climbed by more than 3 per cent each. Sensex is currently shy of the 58,200 mark and Nifty 50 is near 17,315 level.

During this week, markets will keep a close watch on corporate results for the second quarter of FY23 with TCS, Wipro, HCL Tech, and Infosys in focus. Broadly, IT stocks will be in focus due to quarterly earnings. Globally, FOMC minutes are likely to hold dominance in fuelling market sentiment. While inflation print of major economies like the US, China, and India will also have a role in the performance. Domestic equities will also track the movement of global peers.

Apurva Sheth, Head of Market Perspectives, Samco Securities, said: “The upcoming week is going to be a roller-coaster ride as a host of important events are slated to release. Markets across the globe will be dominated by the FOMC’s minutes that will be released next week. While global investors will keenly monitor inflation figures in the US and China, Indian CPI print will be a key domestic factor to watch out for. Further, Indian IT companies will kick start the quarterly results season. The Nifty ended the week marginally above 1 per cent. Following a hefty battering from 18,100 levels a few weeks ago, it appears that the bulls are finally making a comeback. The bulls are expected to maintain 17,000 for the month of October before attempting to retest at 18,100. Short-term resistance is positioned at 17,500 levels.”

Q2 Earnings

The onset of Q2 corporate results is this week with TCS quarterly earnings to be the first major one scheduled on October 10. HCL Tech and Wipro to announce Q2 results on October 12, followed by Infosys on October 13.

FOMC Minutes of Meeting

The US Federal Reserve will release its minutes of meeting for the last meeting on Wednesday, when it announced a rate hike of 75 basis points. Markets will be looking at the commentary from the Fed members in order to tame the rising inflationary pressure.

Fed chair Jerome Powell went on to reiterate that the FOMC were ‘strongly committed’ to driving inflation lower, while signalling that more rate rises are on the way. Powell added that there was no painless way to drive inflation lower.

Macroeconomic Numbers

India will announce its macroeconomic indicators including industrial output and inflation numbers in the coming week, which are likely to guide the course of action in the days to come. Inflation numbers have eased mildly recently, but any negative surprise may dent the sentiments.

Along with India, the US will also announce the inflation data in the coming week. The rising prices in the world’s largest economy have led to a sharp rise in the interest rate. Another report red-hot prices will lead to the US Fed becoming more hawkish.

Crude oil

The latest rise in crude oil is hurting the sentiments for an import oriented economy like India, who is highly dependent on overseas crude for its energy needs. The big orders of crude take off a big chunk of India’s forex reserve.

India’s foreign exchange reserves fell by $4.85 billion to $532.66 billion for the week ending Sep 30, according to data released by the Reserve Bank of India. The foreign exchange reserves fell to their level since July 2020.

Rupee

The Indian currency has been on a free fall recently, hitting new record lows regularly, dropping more than 11 per cent since the beginning of the year.

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