Domestic markets faced headwinds last week due to weak cues from the global markets but it found firmer ground on Friday after a three-session losing streak amid a positive trend in global markets and unabated foreign fund inflows. Sensex gained 298 points to end the week at 61,729 and Nifty also surged by 0.41 per cent to end the day above the 18,200 point mark.
In the last week the release of the Wholesale Price Index Inflation also helped boost the domestic markets. The WPI for April dropped 0.92 per cent and turned negative for the first time since July 2020.
Here are the important events that could impact the markets in the coming week:
FOMC Minutes
Market participants are waiting for the release of the Federal Open Market Committee (FOMC) meeting minutes, scheduled for May 24. The US Federal Reserve on May 4 had increased its interest rate by 25 basis points to navigate the ongoing banking crisis and inflation. Interestingly, the US Fed has also hinted at a possible pause in the rate hike cycle and it is expected that the minutes of the meeting would help shed some light on the situation.
US Debt Ceiling talks
US President Joe Biden's administration is reaching for a deal with Republicans as the nation faces a deadline as soon as June 1 to raise the country's borrowing limit, now at USD 31 trillion, to keep paying the nation's bills. However, the second meeting between White House and Republic Congress broke on Friday with no progress cited by either side and no additional meeting set up in the coming week.
Expiry of May month derivatives contracts
"We expect choppiness to remain high this week too due to the scheduled expiry of May month derivatives contracts. Meanwhile, global markets performance and consistency in the foreign fund flows will remain on the participants' radar for cues," Ajit Mishra, VP - Technical Research at Religare Broking Ltd, said.
UK Inflation rate
Traders will also be focusing on the UK Inflation rate that is expected to be released on May 24 for April with many experts expecting it to be below 10 per cent in April. The Retail Price Index will also be released on the same day.
Corporate Earnings
The fourth quarter earnings season is entering its seventh week with over 1150 companies yet to announce their numbers. The major companies announcing their results this coming week include BPCL, Ashok Leyland, NMDC, Hindalco, Oil India, LIC, National Aluminium Co, Zee Entertainment, Vodafone Idea, BHEL, Info Edge, ONGC, Sun Pharma, Shree Cement, PB Fintech, Aditya Birla Fashion and Retail, Page Industries, IRFC, Nykaa, Biocon, Fortis Healthcare, Dixon Technologies and Amara Raja Batteries.
Over the near term, the markets may be expected to be volatile, led by stock-specific movements as the earnings season goes underway in full swing, Joseph Thomas, Head of Research at Emkay Wealth Management, said.
Ex-Dividend
Bank of Maharashtra, Great Eastern Shipping Company, Manappuram Finance, Rossari Biotech, Kansai Nerolac Paints, Kennametal India, and Trent are expected to turn ex-dividend next week.
Domestic quarterly earnings, global trends and foreign fund trading activity would dictate the movement in equity markets, which may face volatility amid the scheduled monthly derivatives expiry this week, analysts said.
With inputs from Agencies
