Stock Market Prediction Next Week (23- 27 Oct 2023)
Stock Market Prediction Next Week (23- 27 Oct 2023): The Indian stock market snapped a two-week winning streak and closed in the red. The market sentiments were dented due to Middle East conflicts, persisting selling pressure from FIIs, and higher Treasury yields and crude prices.
Global markets fell sharply after US Fed Chair Powell’s speech on Thursday and this impacted negatively the local markets. Investors fear that the Fed will keep the interest rates higher for a longer period.
Next week will be a holiday-shortened week, Indian stock markets will remain closed on Tuesday 24 October on account of Dussehra. Indian equity markets are likely to remain volatile due to the monthly F&O expiry on the NSE.
Investors will be closely looking at the development of the Middle East conflict, quarterly earnings will remain in the focus, particularly in the second half of the week. The global cues, crude oil prices, and FII activity are likely to impact the domestic markets next week. The other key factors that are likely to influence the stock market prediction next week are given below;
Stock Market Prediction Next Week (23 – 27 Oct 2023)
Monthly Expiry: Nifty & Bank Nifty
On Friday, the Nifty index once again witnessed a gap-down opening and traded on a weak note throughout the day with the crucial support of the 19500 zone. The nifty index has sustained a 19500 level as of now and is precariously placed with sentiment maintained with a cautious approach.
The Nifty index breaching below the above-mentioned support shall trigger further intensified selling pressure. On a weekly basis, the Nifty index could trade in a range of 19200- 19900 levels.
The Bank Nifty index also witnessed a narrow rangebound session on Friday. The index was hovering near the 43700-43800 zone for the last 2 sessions with the bias maintained a little bit weak. The index has a near-term crucial support zone of 43400 levels.
A decisive breach below the 43400 zone shall further weaken the overall trend and expect for further slide to 42000 levels. The Bank Nifty index would have a weekly range of 42600-44800 levels
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Q2 Earnings
As the domestic earnings season gained steam last week IT, Bajaj Finance, HUL, and Wipro shares fell sharply between 2% to 4% after the second quarterly earnings reported. However, Bajaj- Auto gained more than 8% after the company reported a 20.01% jump in standalone net profit in the second quarterly results.
Two Nifty 50 stocks ICICI and Kotak Bank reported their second quarterly earnings on Saturday 21 October. Kotak Bank has released the earnings report and its second-quarter net profit beats market estimates while ICICI Bank also beat Street estimates and reported a rise of 35 percent in standalone net profit. On Monday, we may see its impact on the Bank Nifty index, as the combined weightage of both stocks in the Banking index is around 33%.
In the coming week, there will be 11 Nifty 50 stocks including hundreds of mid and small-cap stocks will announce their quarterly earnings for Q2FY24. The schedule for the Nifty 50 stock’s quarterly earnings is given below.
| Q2FY24 Result dates for Nifty50 Stocks | |
| 25 October 2023 | Axis Bank |
| 25 October 2023 | Tech M |
| 26 October 2023 | Asian Paints |
| 27 October 2023 | Bajaj Finserve |
| 27 October 2023 | BPCL |
| 27 October 2023 | Cipla |
| 27 October 2023 | Dr. Reddy |
| 27 October 2023 | Maruti |
| 27 October 2023 | Reliance |
| 27 October 2023 | SBI Life |
| 28 October 2023 | NTPC |
Middle East Conflicts
It’s now almost two weeks since the war between Israel and Hamas started. Day by day the war is intensifying and impacting the financial markets. Investors are selling equities and looking for safe-haven assets like gold or bonds. Indian stock markets declined for three consecutive days on Friday due to the impact of the Middle East conflict.
The crude oil futures rose as traders worried due to a potential reduction in Middle East supplies. Several central banks already warned that the higher crude oil prices are likely to increase the inflationary pressure. The higher inflation means higher borrowing costs for a longer period and will ultimately impact the economy. Further escalation in the Middle East conflict will dampen the market mood and more selloff could be seen in the markets.
Global Stock Market Prediction Next Week
The global stock markets fell sharply during the week that ended on 20 October. The global market sentiments were hit as US Treasury yields spiked to multi-year highs after Fed Chair Powell said stronger than expected US economy might need tighter policy to tame high inflation. The earnings reported from big US companies were mixed as Tesla fell sharply and Netflix gained after the quarterly earnings.
The surge in crude oil prices and the Middle East conflict also dampened the market moods. The concerns about Chinese property sectors after the real estate giant Country Garden missed the overseas debt payment overshadowed China’s strong economic data reported last week.
The coming week will be busy for traders, four US mega-cap stocks Amazon, Microsoft, Alphabet, and Meta Platforms will report their quarter earnings. US PCE price index, Q3 GDP growth rate, Federal Reserve Chairman Jerome Powell’s speech, and Michigan consumer sentiments will also influence the global market sentiments.
The geopolitical tension in the Middle East will remain in focus as it could further escalate and dent the market sentiments next week. European Central Bank interest rate decision, China’s industrial profit, and flash PMI data for October from several countries will impact the global market sentiments in the coming week.
Global Macroeconomic Data
| Important Global Macro Data Next Week | ||
| 24 October 2023 | Jibun Bank PMI Flash Oct | Japan |
| 24 October 2023 | Unemployment Rate Aug | GB |
| 24 October 2023 | HCOB PMI Flash Oct | EA |
| 24 October 2023 | S&P Global /CIPS PMI Flash Oct | GB |
| 24 October 2023 | S&P Global PMI Flash Oct | US |
| 25 October 2023 | New Home Sales Sept | US |
| 26 October 2023 | Fed Chair Powell’s Speech | US |
| 26 October 2023 | ECB Interest Rate Decision | EA |
| 26 October 2023 | Durable Goods Order Sept | US |
| 26 October 2023 | GDP Growth Rate Q3 | US |
| 26 October 2023 | Goods Trade Balance Sept | US |
| 26 October 2023 | Initial Jobless Claims | US |
| 26 October 2023 | PCE Price Q3 | US |
| 26 October 2023 | Pending Home Sales Sept | US |
| 27 October 2023 | Tokyo CPI Oct | Japan |
| 27 October 2023 | Industrial Profits (Sept) | China |
| 27 October 2023 | PCE Price Index and Core PCE Sept | US |
| 27 October 2023 | Michigan Consumer Sentiment Oct | US |
| 27 October 2023 | Michigan Consumer Expectation Oct | US |
| 27 October 2023 | Michigan Inflation Expectation Oct | US |
Crude Oil Prices
The crude oil prices rose for the second consecutive week, as traders fear that the Israel-Hamas war may spread in the Middle East, potentially disrupting supply. On a weekly basis, the US WTI crude gained around 2% while London-based Brent was up by 2.8%.
The crude oil prices got a boost after the news that US President Joe Biden planning to buy oil and refill the heavily-drawn Strategic Petroleum Reserve. On Thursday, the Department of Energy said two separate offers of crude purchases totaling 6 million barrels, were to be delivered to SPR between December this year and January 2024.
The stronger-than-expected Chinese economic data release early during the week also supported the crude prices. Meanwhile, some support was received after US Fed Chair Powell said the US economy remained resilient, indicating that fuel consumption in the country will remain strong.
Traders need to closely monitor the crude oil prices in the coming week as higher crude oil prices can see further correction in the equity markets.
FII & DIIs flow
Foreign Institutional Investors (FIIs) were the net sellers in the Indian equity cash markets last week. They offloaded shares worth Rs 2799.08 crore during the week. Domestic Institutional Investors (DIIs) were the net buyers last week. They bought shares worth Rs 3510.97 crore, which was more than what FIIs had sold during the week.
FIIs will continue their selling spree in the Indian equity cash markets, as US Treasury yields are at a fresh 16-year high level. Traders should keep a close eye on FII and DII activity in the coming week.
Conclusion
Indian stock markets closed lower for the third consecutive day on Friday. The market sentiments are negative due to geopolitical tension, higher yields, US interest rate uncertainty, rising crude oil prices, and persistent FII selling.
Going ahead, the global cues and the monthly F&O expiry are also likely to influence the local markets. Investors can also follow our Daily Morning Report at 7:30 a.m. to know the market direction.
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