Economic data, US mid-term elections, FII action on D-Street traders’ radar next week

On Friday, Nifty50 ended 1.8% higher at 18,349.70 points, its highest level in 12 months. Intraday, it hit a 52-week high of 18,362.30 points.

The 30-stock Sensex settled nearly 2% higher at 61795.04 points, its highest-ever closing high. Intraday, the index hit a 52-week high of 61840.97 points.

The prevailing positive global sentiment is set to drive equities further up in the coming week, but some analysts recommend adopting a cautious approach.

“With benchmark indices touching 52 week highs and the Nifty Bank index touching new all time highs, we remain cautiously optimistic, advising investors to be agile and aware of the recent and upcoming macroeconomic events in order to make dynamic decision-making both ways,” said Anmol Das, head of research at Teji Mandi, a subsidiary of

.

With the earnings season at the last leg, investors’ focus will be on global news, dollar movement, and economic data points for cues in the coming week.

US Midterm Elections
With counting of votes underway, all eyes will be on the final outcome this week. Indications so far are of a close race between the Republicans and the Democrats. According to reports, the Republicans appear to have an edge in the House of Representatives.

With 218 seats needed for a majority in the House, Republicans had won 211 seats and Democrats 199 as of Friday, according to the Associated Press.

As far as control of the Senate is concerned, that hinges upon the outcome of three states namely Arizona, Nevada, and Georgia.

Reports suggest that Democrats are leading in Arizona, while trends are unclear in Nevada.

Q2 Earnings

More than 1,000 companies are scheduled to release their earnings on Monday, as the results season nears end. Oil and Natural Gas Corp and

will be the last Nifty 50 companies to report earnings on Monday.

The other companies releasing numbers on Monday include Bharat Forge,

, , , , among many others.

Economic Data

India’s consumer price inflation data for October is due on Monday and that will be on the investors’ radar, especially after the sharp rise in September.

CPI is widely expected to cool off in October from 7.41% in September. Inflation is widely expected to fall to 6.7%, a level that will be closer to the five-month low of 6.71%, hit in July.

Apart from this, inflation data in the UK, GDP growth projections in Japan will also be in focus.

FII Action
The gains registered by domestic equities this month have been backed by strong buying by foreign investors. In November so far, FIIs have net bought stocks worth $1.5 bln and market participants believe that this trend will continue.

There is a clear change in the approach of FPIs since they bought equities even when the dollar and US bond yields were rising.

“Since inflation in the US is showing a moderating trend, dollar and US bond yields are declining. This means FPIs are likely to buy more in the coming days,” said V K Vijayakumar, chief investment strategist at

.

Technical Indicators

After Nifty 50 and Sensex hits 12-month highs, the trend has turned bullish and market experts see chances of the indices hitting record highs.

“Nifty has decisively closed above the key hurdle of 18150 levels and is also placed at the edge of moving above another resistance of 18,350 levels,” said Nagaraj Shetti, technical research analyst at

Securities.

“Hence, further upside is likely from here, and one may expect new all time high above 18,600 levels in the near term,” he said. Immediate support for the index is placed at 18,150 level.

IPO Watch

The primary market will also see a lot of action in the coming week.

Kaynes Technology India’s public issue, which opened on Nov 10, will close on Monday. As of Friday, the issue was fully subscribed. This issue garnered most interest from institutional investors and employees as both these segments were oversubscribed.

Green Energy Services is another issue, which received 46% subscription on day 1 on Friday. Retail investors have shown strong interest in the issue, as this segment was fully subscribed. The IPO will remain open for subscription till Tuesday.

The issue that will hit the primary market next week is Keystone Realtors, which builds properties under the Rustomjee brand, and it will open for subscription on Monday.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)