Trade war tensions, WPI inflation and Q1 numbers among key factors that may guide market next week

August 13, 2018

NEW DELHI: Mr Market scaled new peak in the week gone by, but hit a speed bump on Friday, owing to panic selling on financial counters. The benchmark BSE Sensex slipped 0.41 per cent to 37,869.23, but posted a weekly rise of 0.83 per cent.

The broader Nifty50 index ended 0.36 per cent lower at 11,429.50 on Friday, but gained 0.60 per cent for the week.

The stock market will remain closed on Wednesday on account of Independence Day. Below is a list of key events or factors that may steer market in the holiday truncated week.


Last leg of earnings:
The earnings season is drawing to a close. Among prominent names, Oil India, Abbott India, Cadila Healthcare, DHFL and Hindustan Aeronautics are scheduled to declare their Q1 results on August 13. Indiabulls Real Estate will announce its June quarter numbers on August 14.

Trade dispute
The escalating trade dispute between the US and China is likely to keep investors on tenterhooks. On Friday, China’s top news paper rebutted trade war criticism saying like an elephant, China cannot hide its size and strength. “The growing trade conflict is causing rifts within China’s Communist Party, with some critics saying that an overly nationalistic Chinese stance may have hardened the US position,” Reuters reported citing sources.

WPI inflation
The inflation data based on wholesale price index (WPI) for July is slated to release on Tuesday. Wholesale prices shot up to 5.77 per cent in June on increasing prices of vegetables and fuel items. The Wholesale Price Index (WPI)-based inflation stood at 4.43 per cent in May and 0.90 per cent in June last year.

Rupee
The domestic unit on Friday fell sharply by 15 paise to end to 68.83 against the resurgent dollar amid fears of escalation in trade tensions worldwide. It hit a fresh 3-week low in early trade before regaining some lost ground.

According to a Reuters poll, the rupee will trade in a tight range in the coming year but not far from its historic low owing to higher crude prices and trade disputes. The Indian currency has lost over 7 per cent this year.

What does tech charts say?
The Nifty50 index on Friday formed a small bearish candle similar to the Bearish Belt Hold pattern on the daily chart. On the weekly scale, the index continued to form higher high and higher low for the fifth session, but formed an indecisive Spinning Top candle.

“For the forthcoming week, if Nifty stays below the key support zone of 11,379–11,359, then we may see the profit booking getting extended towards 11,300–11,235. But even if this happens, it would be a healthy sign with a broader view and hence, should be construed as a buying opportunity,” says Angel Broking in its weekly report.

On the upside, the immediate resistance remains at 11,500-11,520. It’s a matter of time; we will not be surprised to see this hurdle crossed to continue this northward journey, the brokerage said.

Stock-specific actions

TCS: Tata Consultancy Services (TCS) has fixed record date as August 18 for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the buyback offer of the company.

Coal India: The company on Saturday reported 61 per cent year-on-year rise in net profit at Rs 3,786.44 crore for June quarter. Consolidated revenue from operations for the quarter rose 17.96 per cent to Rs 24,260.87 crore compared with Rs 20,567.81 crore in the year-ago quarter.

IOC: Indian Oil Corporation (IOC) has reported 50.27 per cent jump in consolidated net profit at Rs 7,092.42 crore for the first quarter of the current fiscal.

Jet Airways: The battered airline, which deferred its June quarter results without specifying any reasons, on Friday informed regulator Sebi that it has not yet decided on the new date to announce the earnings as the audit committee has sought more time to finalise the accounts.



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