The Diwali week starting from October 28 may see a fall in the stock market. Global and domestic economic data including quarterly results of companies, geopolitical tensions will determine the pace of the market.
The Sensex last week closed down 2.24% at 79,402, below the psychological level of 80,000, while the Nifty was down 2.7% or 673 points at 24,181. It has fallen 8% from its record high on September 27.
The Nifty Midcap 100 index fell 5.75% and the Smallcap 100 index fell 6.5%. Bank, FMCG, Auto, Pharma, Metal, Oil & Gas and Realty stocks declined in the range of 2.5-7% during the week.
1. Quarterly results of companies: Adani, Maruti to declare results
This week, around 400 companies will announce their July-September quarter results, including Bharti Airtel, Sun Pharmaceutical Industries, Adani Enterprises, Adani Ports and Special Economic Zone, Cipla, Maruti Suzuki and Larsen & Toubro. Apart from this, the results of non-NIFTY 50 companies Adani Power, Ambuja Cement will also be announced.
2. Indian and foreign investors: FIIs sold shares worth ₹20,000 crore
Last week, Foreign Institutional Investors (FIIs) in the cash segment invested Rs. A net sale of over 20,000 crore shares was made. This led to total net sales in October of Rs. 1 lakh crore, the highest ever monthly outflow.
However, in the same week Domestic Institutional Investors (DII) added Rs. 22,915 crore worth of shares were bought, which in October was Rs. 97,091 crore had been reached. The Indian rupee stood at 84 against the US dollar for the fourth consecutive week.
3. Global economic data: US unemployment rate
Data on GDP growth, PCE prices and real consumer spending will be available for the July-September period. The US economy grew by 3% in the April-June period this year. Apart from this, monthly unemployment rate data will also come. In September it was 4.1%.
All of this data is important ahead of the Federal Open Market Committee's interest rate decision on November 8. The Federal Reserve cut interest rates by 50 bps in the last meeting.
4. Domestic Economic Data: Data on Foreign Exchange Reserves
The final manufacturing PMI data for October will be released on November 1. Preliminary estimates for the month showed the HSBC India manufacturing PMI rose to 57.4 from 56.5 in September.
Apart from this, investors will also keep an eye on infrastructure output data on October 30 and fiscal deficit data on October 31. Foreign exchange reserves data for the week ending October 25 will be released on November 1.
5. Geopolitical tensions: Israel's attack on Iran
Israel responded to Iran's attack in the early hours of Saturday after 25 days. According to the New York Times, 20 targets were attacked in 3 hours. These include missile factories and military bases. There was also an attack near Tehran's Imam Khomeini International Airport. The attacks started at 2:15 am local time and continued till 5 am.
The impact of these attacks on Iran can be seen on oil prices. Rising crude oil prices typically increase transportation costs and potentially undermine corporate earnings. Its negative effect can be seen on the stock market. Last week, Brent crude rose 4% to $76.05 a barrel. A week before that, prices had fallen by 7.6%.
The stock market fell for five consecutive days
On October 25, the stock market saw its fifth straight day of decline. The Sensex closed down 662 points (0.83%) at 79,402. The Nifty also closed down 218 points (0.90%) at 24,180. At the same time, BSE Small Cap fell by 1,307 points (2.44%).
Out of 30 Sensex stocks, 20 declined and 10 advanced. Out of 50 Nifty stocks, 38 declined and 12 advanced. All sectors closed lower except the FMCG and healthcare indices. Nifty Consumer Durables was the biggest loser at 2.52%.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
