Q4 earnings, vaccination among key factors that may guide market this week


NEW DELHI: Bluechip indices remained volatile for yet another week but managed to gain over a percent. The beginning of the week was downbeat, however RBI’s announcements to support SMEs, individual borrowers and healthcare infra boosted sentiment in the middle.

Besides, encouraging results by some of the index majors also supported recovery as the week progressed. Among sectoral indices, the metals pack witnessed a phenomenal run of 10 per cent while most others traded in tandem with the benchmark and ended with modest gains.

This week, the trend in the market will be dictated by developments in Covid spread, upcoming result outcomes and global cues. Industrial production data for March and inflation data for April is expected to be released this week. IIP data is expected to show robust growth due to economic recovery witnessed in March while inflation rates are to remain at elevated levels.


“This week is a holiday-shortened one and participants will be eyeing macroeconomic data. Though we’ve not seen any major impact of COVID second wave on markets yet, the news of strict lockdown in several states may deteriorate the sentiment ahead. Amid all, participants are keeping a close watch on the vaccine drive as well,” said Ajit Mishra, VP (Research), Religare Broking.

Below are key factors that will decide market action this week:

Covid-19 pandemic
The path of the second wave of the pandemic is likely to dominate market discourse for the week. India has been reeling under a devastating wave and any respite on that front may encourage investors. However, if it worsens, the morale may take a hit. India reported 4,03,738 new Covid-19 cases, 3,86,444 discharges, and 4,092 deaths in the last 24 hours, according to data from the Union Health Ministry.

Even as many more states are starting vaccination for 18-45 age group, shortage of jabs is dragging the speed of inoculation. Delhi on Saturday said it is left with just a few days of stocks, while others have floated tenders to procure more. Investors would keep an eye on progress on this front.


Q4 earnings
The fourth quarter earnings season has peaked with many large companies lined up to declare their numbers. Among Nifty stocks, Asian Paints, Lupin, UPL, Vedanta, Cipla, Dr Reddy’s Laboratories, and Larsen & Toubro will announce numbers. Besides investors will also keep an eye on a number of smaller companies that are scheduled to publish their results. They include HFCL, Aarti Industries, Godrej Consumer Products, Granules India, Kalpataru Power Transmission, KEC International, Neuland Labs, Apollo Tyres, Birla Corporation, Happiest Minds Technologies, Jindal Steel & Power, Pidilite Industries, Tata Power and Voltas, among others.

Macro numbers
India will release industrial and manufacturing production data for March on Wednesday while the country will also release inflation data for April, which will be eyed by traders, especially those active in the currency market.

Nifty outlook
Nifty50 closed the week on a positive note. However, the market is still oscillating within a consolidation range. The market breadth also remained quite strong and many stocks are witnessing a fresh up move or continuation in uptrend.


“As long as Nifty trades below the lower end of the rising channel, there are chances of this rally being a bull trap. The short-term support and resistances are now placed at 14,400 and 15,000, break on either side will dictate the short-term trend. We suggest traders maintain a neutral bias and keep a strict stop loss below the immediate support,” said Nirali Shah, Head of Equity Research, Samco Securities.

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