There may be a decline in the stock market in the Diwali week starting from 28th October. Quarterly results of companies, global and domestic economic data including geopolitical tension will decide the movement of the market.
Last week, the Sensex fell 2.24% to close at 79,402, below the psychological level of 80,000, while the Nifty fell 2.7% or 673 points to 24,181. It has fallen 8% from the record high of September 27.
The Nifty Midcap 100 index fell by 5.75% and the Smallcap 100 index fell by 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 will release results
This week, around 400 companies will release their July-September quarter results, including companies like Bharti Airtel, Sun Pharmaceutical Industries, Adani Enterprises, Adani Ports and Special Economic Zone, Cipla, Maruti Suzuki and Larsen & Toubro. Apart from these, results of non-Nifty 50 companies Adani Power, Ambuja Cement will also be released.
2. Indian and foreign investors: FIIs sold shares worth ₹20,000 crore
Last week, Foreign Institutional Investors (FIIs) made net selling of shares worth more than Rs 20,000 crore in the cash segment. Due to this, the total net selling in October exceeded Rs 1 lakh crore, which is the highest monthly outflow till date.
However, in the same week, Domestic Institutional Investors (DIIs) bought shares worth Rs 22,915 crore, taking it to Rs 97,091 crore in October. The Indian rupee remained at the level of 84 against the US dollar for the fourth consecutive week.
3. Global Economic Data: America's Unemployment Rate
Data on GDP growth, PCE prices and real consumer spending for the July-September period will be available. The US economy had registered a growth of 3% in the April-June period this year. Apart from this, data on monthly unemployment rate will also come. It was 4.1% in September.
All these data are important ahead of the Federal Open Market Committee's interest rate decision on November 8. In the last meeting, the Federal Reserve had cut interest rates by 50 bps.
4. Domestic Economic Data: Data on Foreign Exchange Reserves
The final data of Manufacturing PMI for October will be released on November 1. Preliminary estimates during the month indicated that the HSBC India Manufacturing PMI rose to 57.4 for October from 56.5 in September.
Apart from this, investors will also keep an eye on the infrastructure output data on October 30 and fiscal deficit data on October 31. Data on foreign exchange reserves for the week ending October 25 will be released on November 1.
5. Geopolitical Tension: Israel's attack on Iran
Israel retaliated in response to Iran's attacks in the early hours of Saturday, 25 days later. According to the New York Times, 20 targets were attacked in 3 hours. These include missile factories and military bases. An attack also took place near Tehran's 'Imam Khomeini International Airport'. The attacks began at 2:15 a.m. local time and continued until 5 a.m.
The effect of these attacks on Iran can be seen on oil prices. Rising crude oil prices typically increase transportation expenses, and potentially weaken corporate earnings. Its negative impact can be seen on the stock market. Last week, the price of Brent crude increased by 4% to $ 76.05 per barrel. A week before that, prices had fallen 7.6%.
Stock market declined for five consecutive days
The stock market was falling for the fifth consecutive day on October 25. Sensex closed at 79,402 with a fall of 662 points (0.83%). Nifty also fell by 218 points (0.90%), it closed at the level of 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 rose. Out of 50 Nifty stocks, 38 declined and 12 rose. Except FMCG and healthcare indices, all sectors closed with a decline. Nifty Consumer Durables fell the most by 2.52%.
Graphics Source: VaskarAssets
