By Rohit Vaid
Mumbai, April 10 (IANS): Upcoming quarterly results, along with global and domestic macro-economic data, are expected to guide the Indian equity markets during the week ahead.
Market observers pointed out that investors' sentiments will be heavily influenced by foreign funds inflow, global crude oil prices and the rupee's movements.
"The earnings season remains crucial. Global risk sentiment which is somehow tied up to the oil prices needs to be watched," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
The Q4 (fourth quarter) results season started April 8. Infosys is expected to be the first blue chip firm to come out with its results on April 15.
Besides the Q4 results, global cues would dictate the trajectory of the equity markets, elaborated Vaibhav Agarwal, vice president and research head at Angel Broking.
"We expect markets to react to global cues which could remain volatile considering the FOMC (US federal open market committee) meeting later this month," Agarwal told IANS.
The US FOMC meet assumes significance -- as it will decide the future course of the US rate hikes. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.
Besides, global and domestic macro-economic data are expected to play a major role in setting the tone for the equity markets, explained Anand James, chief market strategist, Geojit BNP Paribas Financial Services.
"With most major central banks opting to go easy on the interest rates recently, the inflation data of major economies being scheduled next week should signal how far such decision can be justified," James explained.
The week ahead will disclose global macro-economic data, such as the March inflation figures from China, European countries and the US.
In addition, the domestic macro-economic data will start from April 12, with the release of the Index of Industrial Production (IIP) and retail inflation (Consumer Price Index) figures.
These data points will be followed by the Wholesale Price Index (WPI) on April 18.
According to analysts, the truncated week ahead might be front loaded with volatility, due to thin volumes and unwinding of long positions ahead of the extended weekend.
The domestic equity markets will be closed on account of Dr. Baba Saheb Ambedkar Jayanti on April 14 and Ram Navami on April 15.
Pankaj Sharma, head of equities for Equirus Securities, cited: "On market expectations next week, we think that if the foreign investors are bearish, we may again be looking at some more losses."
For the week under review, data with stock exchanges revealed that FIIs (Foreign Institutional Investors) divested stocks worth Rs.877.26 crore.
The same data showed that domestic institutional investors (DIIs) sold stocks worth Rs.178.22 crore.
However, figures from the National Securities Depository Limited (NSDL) highlighted that the FPIs (Foreign Portfolio Investors) invested Rs.7,624.87 crore or $1,150.09 million in the equity and debt markets from April 4-7.
"FIIs buying in stocks may slow down as valuations are getting stretched considering weak fundamental picture," cautioned Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities.
The week ended April 8 saw the Indian equity markets plunge on the back of disappointment over the extent of reduction in the key lending rates.
Further, investors were spooked by a likely announcement on US rate hike. This diminished the foreign funds inflow into the equity markets.
The subdued weekly trade led to the barometer 30-scrip sensitive index (Sensex) of the BSE to plummet by 596 points or 2.35 percent to 24,673.84 points.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) receded by 157.85 points or 2.04 percent to 7,555.20 points.