Indian stock market outlook for next week (18 to 22 Oct )

 

 

Market outlook for next week (18 to 22 Oct ): Indian stock markets gained more than 2 percent during the week ended 14 October. Markets gained consecutive for the second week in a row. Last week the market sentiments were positive due to strong economic data, better earnings, positive global cues, and FIIs inflow. However, the market upside remains capped due to high crude oil prices.  

 

Factors that may impact the Indian stock market next week

 

Q2FY22 Earnings

 

The second-quarter earnings season has just begun, last week markets reacted positively after the announcement of Q2FY22 earnings of Wipro and Infosys. HCL Tech and HDFC Bank have announced their July-Sept quarterly results last week after the market hours. Both the companies’ results beat the street estimates and are expected to react positively on Monday. Next week, the Q2FY22  earnings of Nifty50 companies are given below

 

Q2 FY22 Results dates for Nifty50 Stocks
19 October 2021	Hindustan Unilever
19 October 2021	Nestle Ind
21 October 2021	Asian Paints
21 October 2021	JSW Steel
22 October 2021	HDFC Life
22 October 2021	Reliance
22 October 2021	Tata Consumer Product

 

Global market cues

 

Last week the major global market indexes were closed higher. The better quarterly earnings and their expectations, the decline in delta virus infections, relaxation in Covid-19 related restrictions, stable in bond yields were the reasons for the market to close higher. 

However, traders were cautious and the upside remain capped due to higher oil prices and concerns about a surge in inflations. Next week, below are the important macroeconomic data that are going to set the global market directions

 

Important Global Macro Data Next Week
18 October 21	GDP growth rate	China
18 October 21	Industrial Production SEP	China
18 October 21	Retail sales & Unemployment rate	China
18 October 21	Industrial Production SEP	US
20 October 21	Balance of Trade EXP/IMP	Japan
20 October 21	Loan Prime rate	China
20 October 21	Inflation Rate	GB
21 October 21	Initial Jobless Claim	US
22 October 21	Gfk Consumer Confidence Oct	GB
22 October 21	Inflation rate SEP	Japan
22 October 21	Jibun Bank PMI Flash Oct	Japan
22 October 21	Retail Sales SEP	GB
22 October 21	Markit/CIPS PMI Fash Oct	GB
22 October 21	Markit PMI flash Oct	US

 

Technical Outlook

 

Technical view on Nifty and Bank Nifty Futures for next week

Nifty futures current position is on Buy, traders can continue the Buy position and reverse to the short position if Nifty futures close below 18250.

Bank Nifty futures current position is Buy, traders can continue the Buy position and reverse to the short position if Bank Nifty futures close below 38870.

 

FII & DIIs flow

 

Foreign Institutional Investors (FIIs) have turned net buyers in the last week whereas the Domestic Institutional Investors (DIIs) were the net sellers in the cash market segments. FIIs bought Rs 1037.37 crores while DIIs sold Rs 3296.75 crore in the cash market segment during the week ended 14 October. 

On a monthly basis, FIIs turned net sellers in the month of October, reversing the trend of net investment in the previous month. So far in the month of October FIIs sold Rs 2516.89 crore in the cash segment. According to the market experts, a sharp increase in energy prices was the key reason FIIs outflow.

In addition, any increase in the rate by the U.S Fed Reserve in the near future would also act as a key headwind for overall flow in the emerging markets. Hence FPI flows are expected to remain volatile in the emerging markets for the coming days.

 

Coronavirus risk & Vaccination

 

The Covid-19 infections are declining in India, it has recorded less than 20K infections on a daily basis since last week. The positivity rate of Covid-19 infections fell further to 1.73 percent while the recovery rate improved to 98.07 percent as per the government data ending 8 am 16 October. This has resulted in further easing of restrictions especially in Aviation, Cinema/Auditorium, and Education industries.

Covid-19 vaccination drive is going on smoothly, more than 97 crore vaccine doses were administered so far in India. The government has also given emergency use approval to Covaxin for the age group of 2-18 years. The decline in Covid-19 in India and acceleration of vaccination drive minimizes the risk of the economy getting affected by the deadly infections now.

 

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Happy Investing!!

Editor’s Desk

 

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