Share market outlook: Earnings, CPI inflation to impact trading in the upcoming week

Share market outlook: Earnings, CPI inflation to impact trading in the upcoming week

Besides, the trading activity of Foreign Portfolio Investors (FPIs) would also be tracked.

FPJ Web DeskUpdated: Sunday, May 07, 2023, 12:00 PM IST
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Share market outlook: Earnings, CPI inflation to impact trading in the upcoming week | Image Source: Wikipedia (Representative)

The domestic equity markets will be driven by ongoing quarterly earnings announcements and global factors this week, analysts said.

Besides, the trading activity of Foreign Portfolio Investors (FPIs) would also be tracked.

Markets last week

Last week, the 30-share BSE benchmark dipped 58.15 points or 0.09 per cent.

Markets declined more than 1 per cent on Friday dragged down by a heavy sell-off in index major HDFC twins. Both HDFC Bank and HDFC fell sharply amid reports that the merged HDFC entity could see significant fund outflow.

According to market analysts, the domestic market continued to be positive at the beginning of the last week, aided by strong FII inflow and favourable domestic macroeconomic data.

"India outperformed most markets in April. The principal reason for the outperformance is the sustained buying by FPIs. During the last seven trading sessions i.e. from 26th April to 5th May, FPIs have bought equity worth Rs 11,700 crore," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Earnings

With the earning season entering its fifth week there are about 300 companies that are expected to announce their results in the upcoming week.

"In the domestic market, the March 2023 quarterly earnings season and Karnataka assembly elections will be in focus. Asian Paints, Cipla, Eicher Motors, Larsen & Toubro and UPL Q4 earnings are in the pipeline for this week," Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, said.

Tata Motors, Gujarat Gas, Apollo Tyres, Dr Lal Pathlabs, Pidilite, Westlife Foodworld, Indian Overseas Bank, Dr Reddy's, Lupin and Godrej Consumer Products would announce their earnings this week.

CPI Inflation

The Ministry of Statistics and Programme Implementation is expected to release All India Consumer Price Index for April on May 12. According to analysts, this could be the first sub-5 per cent print and the lowest print in over 16 months.

Mankind Pharma to make debut

Mankind Pharma will make its stock market debut on May 9. The Manforce condom-makers issue size was reduced to 2.8 crore shares after the company mobilised Rs 1,298 crore through the anchor book. The IPO was subscribed 15.32 times on the back of qualified institutional buyers. The shares of the domestic-focus fourth largest pharmaceutical on Friday were trading the grey market with a premium of Rs 94.

US CPI inflation

The Bureau of Labour Statistics in the US will be releasing April's CPI data on May 10 and analysts expect it to fall to 4.9 per cent on a yearly basis from 5 per cent in March.

US regional banking system

"Global markets are in a brittle mode because everyone is eyeing US regional banking systems (small banks), which are in trouble," he added.

"This week, participants will be eyeing macroeconomic data viz. IIP and CPI for cues on May 12. Besides, the US inflation, which is scheduled on May 10, will also be on their radar," Ajit Mishra, VP - Technical Research at Religare Broking Ltd, said.

Oil prices

The movement of the rupee against the dollar and crude oil prices will also remain in focus, Gour said.

Oil prices this week fell for the third straight week after the Fed rate hike and due to concerns on the health of the US banking systems that will impact the economy and the fuel demand. Additionally, the increase in supply from some of the OPEC members and its alliances also had an impact on the oil prices. On Friday, Brent crude closed at $75.30 per barrel and US West Texas Intermediate settled at $71.34 per barrel.

With input from PTI

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