Indian markets remained bearish for the second consecutive week ending May 13, as benchmark stock indices lost nearly 4 percent. Selling pressure continues to mount by the day as the headwinds get stronger. Ongoing concerns about rising inflation, the possibility of further rate hikes by the global central bank, the lockdown in China and a weakening rupee kept investors on their toes. Over the past week, BSE Sensex fell 2,041.96 points (3.72 percent) to close at 52,793.62 while the Nifty50 lost 629.05 points (3.83 percent) to finish at 15,782.20 levels. However, in the month of May, Sensex and Nifty lost more than 7 percent each.
In the absence of a major event, market participants will closely monitor the performance of global stocks, the war updates between Russia and Ukraine, and the COVID situation in China. The listing of the country’s largest insurer, LIC, would also be on the radar. In terms of data, WPI inflation figures scheduled for May 17 would also be looked at, experts say.
Speaking about the key triggers that could dictate the stock market next week, Anuj Gupta, Vice President — Research at IIFL Securities, said: “The week ending Friday was the worst in the past two years. Dollar index rises to record high in 20 years and commodity price crash were one of the main reasons for the stock market crash this week. These two are expected to continue to dictate global markets, including Dalal Street, next week. You also have to keep an eye on the upcoming business results.”
LIC entry
After overwhelming reactions to the mega-IPO of Life Insurance Corporation (LIC), all eyes are now on the listing. LIC will make its debut on the BSE and NSE on 17 May according to the schedule published in the prospectus.
Rupee vs Dollar
“Last week, the Indian National Rupee (INR) fell to an all-time high, driven by new FII sales. If the rupee remains weak, FII sales could increase further and therefore deviations from the rupee and the dollar are a key factor that could dictate the stock market next week,” said Anuj Gupta of IIFL Security.
Results Q4
Earnings will remain the focus as more than 400 companies will release their March quarterly results next week. Bharti Airtel, DLF, Indian Oil Corporation, ITC, Ashok Leyland, Lupin, Dr. Reddy’s Laboratories, InterGlobe Aviation, Godrej Consumer Products, Hindustan Petroleum Corporation, NTPC and Shree Cement are among the big names to declare their profits next week.
Bharat Forge, Century Plyboards, GlaxoSmithKline Pharmaceuticals, Multi Commodity Exchange Of India, Raymond, Shankara Building Products, Uttam Sugar Mills, VIPIndustries, Bajaj Healthcare, EID Parry (India), GMR Infrastructure, Indoco Remedies, IRB Infrastructure Developers, Dr. Lal PathLabs, Mangalore Chemicals & Fertilizers, Minda Corporation, Sun Pharma Advanced Research Company, Zydus Wellness, Finolex Industries, Granules India, Indraprastha Gas, Indian Overseas Bank, LIC Housing Finance, Pidilite Industries, Dhanlaxmi Bank, Gland Pharma, Punjab & Sind Bank , Ramco Systems, Ujjivan Financial Services, Amara Raja Batteries, Bajaj Hindusthan Sugar, Indiabulls Housing Finance, IDFC, JK Tire & Industries, One 97 Communications, Pfizer, Sobha, Thermax, Zydus Lifesciences and JKCement, to declare their earnings between May 16 -21.
FII sales
Foreign institutional investors (FIIs) continued their selling for the eighth month in a row (May 2022). FIIs last week sold shares worth Rs 19,967.57 crore, while domestic institutional investors (DIIs) bought shares worth Rs 18,202.10 crore.
Helpful Technical Perspectives
Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “Technically, Nifty is trading near the previous swing low of 15,670 and most momentum indicators are trading in oversold territory, so we can expect a bounceback towards 16,180/16,400 levels. while if the Nifty falls below the 15,670 level, the selling pressure could intensify to 15,500/15,000 levels.”
Bank Nifty
“Banknifty is also continuing its journey south and 33,000 is an immediate psychological support level where we can expect some recovery, while below the 33,000 level, 32,000 will be the next major support level. On the upside, 34,000/34,500/35,000 will be a major hurdle,” Meena said.
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