The ongoing second quarter earnings, movement of oil benchmark Brent crude and the uncertainty in the Middle East would dictate terms in the domestic markets this week.
Markets last week
It was a tumultuous week in the market, marked by significant events and high volatility. Despite this, the market closed on a positive note, largely attributed to strong domestic liquidity.
Last week, the BSE benchmark climbed 287.11 points or 0.43 per cent.
"The Indian market rebounded from the sluggish start, propelled by positive expectations on Q2 earnings and moderation in global bond yield despite concerns over the Middle East conflict continues to hover.
"However, the release of higher-than-anticipated US inflation data and resulting increase in treasury yields marginally offset the positive trend by the end of the week," Vinod Nair, Head of Research at Geojit Financial Services, said.
On the macroeconomic front, domestic factors such as a significant drop in Consumer Price Index (CPI) data and impressive industrial production helped to sustain the broad optimism, Nair added.
According to official data, the country's retail inflation rates moderated to a three-month low of 5 per cent in September while factory output soared to a 14-month high of 10.4 per cent.
However, a weak start to the result season by IT sector's subdued revenue guidance, combined with uptick in crude oil prices affected the broad market trend, Nair noted.
FIIs
The activities of Foreign Institutional Investors (FIIs) will influence trading in the markets.
Foreign investors have pulled out nearly Rs 9,800 crore from Indian equities this month so far owing to a sustained rise in US bond yields and the uncertain environment resulting from the Israel-Hamas conflict.
Earnings
"A slew of earnings reports from heavyweights expected this week will significantly impact market direction. The activities of Foreign Institutional Investors (FIIs) will be important, given their recent consistent selling streak," Santosh Meena, Head of Research, Swastika Investmart Limited.
The earnings in the coming week will be in full swing with close to 40 per cent of Nifty50 companies to release their quarterly earnings. The big companies like Kotak Mahindra Bank, HDFC Bank, ICICI Bank, Bajaj Finance, JSW Steel, Bajaj Auto, UltraTech Cement, IndusInd Bank, LTIMindtree, Wipro, Nestle, Hindustan Unilever and ITC will be announcing their Q2 earnings.
The other companies to announced their financial results include L&T Finance Holdings, Jio Financial Services, JSW Energy, Bandhan Bank, CSB Bank, Federal Bank, Voltas, IDBI Bank, PVR Inox, RBL Bank, Coforge, Yes Bank, Zee Entertainment Enterprises, Paytm, Persistent Systems, CEAT, Tata Elxsi, Cyient DLM, Syngene International, Yatra, L&T Technology, Happiest Minds, ICICI Lombard General Insurance and ICICI Prudential Life Insurance.
Israel-Hamas War
Other than the corporate earnings the global markets will also keep an eye on the Israel-Hamas war that began on October 7. The war has only escalated over the last few days as the Israeli military has issued a warning asking over 1 million residents in the northern part of Gaza to shift to the south side. The war casualty has increased on both sides, landing to a total of 3,500.
Additionally, the war has also been one of the major reasons for the increase in oil prices. There are also fears that the escalation of the war may impact oil production in the Middle East with Saudi Arabia, the second largest supplier of crude oil to further cut down its production.
Add to this the tightening of the US sanction programme against Russian crude exports. This will have a severe impact on the oil prices and at the same time pushing investors to invest in gold.
Speech by US Fed Chair jerome Powell
Further, the speech by US Fed Chair Jerome Powell on October 19, will also be an important factor to focus on, as the Federal Reserve is still in favour of one more rate hike by the end of this year to tame inflation.
Wholesale Inflation
India's wholesale inflation numbers for the last month will be released on October 16. According to analysts the wholesale inflation may jump to 0.7 per cent against -0.52 per cent in August.
IPOs
IRM Energy, a Gujarat-based gas distribution company will open its Rs 545 crore IPO on October 18 with a price band of Rs 480-505 per share.
In the SME segment WomanCart will launch its Rs 9.56 crore IPO at a price of Rs 86 per share on October 16. Rajgor Castor Derivatives will open on October 17 at a price of Rs 47-50 per share. On the other hand Arvind and Company Shipping Agencies IPO will close on October 16.
Talking about its debut this week, Cargo Care will make its debut on the NSE on October 18.
