This week, the markets will be paying special attention to company results for the second quarter of FY23, with a focus on TCS, Wipro, HCL Technology, and Infosys. Due to quarterly earnings, IT stocks will often be in the spotlight. The FOMC minutes will undoubtedly keep swaying market sentiment on a worldwide scale. Inflation rates in important economies including the US, China, and India would also affect performance.
Domestically traded stocks will move in the same direction as their global counterparts. The Sensex and Nifty 50 both increased by more than 3% last week. The Nifty 50 is over 17,315 points away, and the Sensex is circling just around 58,200.
On Friday of the week, the Sensex closed at 58,191.29, down 30.81 points or 0.05%. At 17,314.65, the Nifty 50 finished the day down 17.15 points or 0.1%. Among the top gainers were Power Grid, IndusInd Bank, NTPC, Maruti Suzuki, and Titan, a Tata Group vehicle. Shares of M&M, Ultratech Cement, SBI, and TCS were among the top laggards. In terms of sectoral indices, consumer durables stocks have outperformed their peers, while the metal, oil & gas, and IT sectors have suffered some of the greatest losses. In general, the markets saw weak demand for stocks.
In contrast, the Indian rupee Friday sank to a new low against the US dollar of 82.43 before finishing at 82.30.
On the other hand, after being net buyers for three days in a row the previous week, FIIs carried an outflow of $2,250.77 crore in the markets on October 7. October 6, 1,344.63, and October 3 saw FII purchases totaling 279.01 crores, 590.58 crore, and 1,344.63 crores, respectively.
Last week, the Sensex gained more than 1,775 points overall, while the Nifty 50 gained more than 530 points. When compared to the market cap of 2,71,84,601.83 crore as of September 30, 2022, the market cap of BSE-listed companies increased by 3,76,944.94 crore as of October 7.
Vinod Nair, Head of Research at Geojit Financial Services, claims that the week’s movement of the local market was mostly driven by its international peers and the tentative business statistics released by key firms. After the US Manufacturing PMI unexpectedly fell, there was a relief rally, which increased hopes that the US Fed will slow the pace of its policy tightening. But just before the release of US jobs data at the end of the week, hawkish comments from Fed members prompted selling. Stronger-than-expected job numbers could cause a market slump because they may give the Fed more justification to focus on inflation. Oil prices have increased as a result of OPEC’s decision to significantly reduce supply, which is mildly unfavorable for importers like India. The rupee hit a new low as a result of the dollar appearing to be a safer investment due to higher US bond rates.
What can the markets expect this week?
The market, particularly for stocks in the information technology sector, would likely pay close attention to quarterly earnings next week, according to Nair. The inflation report, which is due out next week, will also have a significant impact on how the home market behaves. It is predicted that domestic inflation will remain strong in September, coming in at 7.0%, just like it did in August.
While Head of Market Perspectives at Samco Securities, Apurva Sheth, stated that the forthcoming week would be a roller-coaster ride due to the publication of several significant events. Next week, markets throughout the world will be concentrating on the FOMC minutes, which will be made public. International investors will be actively monitoring the inflation rates in China and the United States, but the Indian CPI print will be a significant domestic factor to watch out for. Additionally, the season of quarterly results for Indian IT companies will start. Investors should respond to earnings misses and beats by taking the company’s long-term prospects into account rather than only concentrating on quarterly results since stock-specific movements will be obvious.
The release of Q2 corporate results began this week, with the first noteworthy one—quarterly TCS earnings—scheduled on October 10. HCL Tech and Wipro will both report their Q2 results on October 12. The same will be done by Infosys on October 13.