LIC listing, FII outflow among 5 factors that will steer market this week

Both benchmark indices ended the week with losses. Nifty50 lost about 3.83 per cent while the 30-share Sensex declined 3.72 per cent. Broader market also saw heavy selling. Sectorally, metals and power stocks were under heavy selling pressure.

“The high level of inflation in the domestic markets, the likelihood of further hikes in policy rates, the persistently high inflation in major economies including the US, and the potential for sustained high prices of crude oil, edible oil, food grains etc and more noise at the market place on slowdown of economic growth in the coming quarters, have all had a negative impact on the markets,” said Joseph Thomas, Head of research, Emkay Wealth Management.

“These factors will continue to have their influence on the markets in the coming weeks.”

Below are key factors that may guide markets this week:


Q4 earnings
Most prominent companies have already announced their March quarter numbers, but there are still many smaller companies that are yet to announce earnings update. Below are some of those names that will announce the numbers during the week. Thus, there could be volatile movement in these names.

Monday: Bharat Forge, , MCX,

Tuesday: , DLF, GMR Infra, ,

Wednesday: , , , Lupin, NDTV,

Thursday: Alkyl Amine, , Endurance Tech, , HPCL

Friday: , , MapMyIndia, Paytm, Sobha

Saturday: BHEL, ,

Inflation
Rising inflation has been a key worry for the market in the last few months. Traders will keep an eye over the metric and discussions around the issue. Meanwhile, India will also announce wholesale inflation data for April during the week, which is also likely to go up, following the retail inflation.

LIC listing
The insurance behemoth Life Insurance Corporation of India will get listed on Tuesday. The company has successfully completed all IPO proceedings. Most analysts expect a weak listing given the market conditions and relatively lower investor participation during the book building process.

Besides, three IPOs will also open for bidding in a bid to raise a total of Rs 2,387 crore. The first IPO is by fertilizer company Paradeep Phosphates, which will open on Tuesday, May 17. The IPO by luxury watch retail player Ethos will open on Wednesday, May 18. And the IPO by eMudhra, India’s largest licensed certifying authority, will open on Friday.

FII outflow
Selling by foreign institutional investors have kept the market under pressure. As per latest data available, they have already withdrawn Rs 25,216 crore from equities so far in May. Going by the trend, this may continue going forward as well.

Technical outlook
Nifty50 ended the week sharply negative and is now trading around a strong support level of 15,700 which coincides with the bottom end of the downward sloping channel. Bank Nifty is also trading near the rising trend line support formed from the lows of March 2020. Both the Indian and major global indices are now at oversold levels. So an immediate rebound in Nifty and Bank Nifty is highly possible, said an analyst.

“Basis how Nifty opens next week, highly aggressive traders may initiate long trades with a strict stop loss right below 15,700. The immediate resistance is now set at 16,600 levels,” said Yesha Shah, Head of Equity Research, Samco Securities.