Global cues, Q4 earnings, FII flows among six factors to set Dalal Street trajectory this week

Global markets will be tracked by investors for cues in early trade. Investors’ focus will also move to March quarter results, which will begin with on April 12. “The coming week marks the beginning of the earnings season and the focus will be on the IT majors to start with,” said Ajit Mishra, SVP - technical research at Religare Broking.

Besides, some macroeconomic data points will be released in the US and Europe, which will also be tracked by the market. Following are the factors that will decide the trajectory for markets in the week ahead.

Global Markets
Investors will continue to take cues from the trend in global markets in early trade in the absence of any significant domestic triggers.

“The performance of the US markets, after the recent decline, will also be in focus and a close below 38500 in the Dow Jones Industrial Average (DJIA) may prompt further fall. On the higher side, it would face stiff resistance around the 39300-39800 zone,” Mishra said.

Macroeconomic Data
Investors will track the minutes of the last meeting of the US Federal Reserve, which will be released on April 10.

China will release its consumer price inflation data for March on April 10, which will also be tracked by investors globally.

The Organisation of the Petroleum Exporting Countries or OPEC will release its monthly report on April 11.


The March quarter earnings will kickstart with TCS on April 12, and this will be one the key triggers to take markets further up.

The March quarter is likely to be a modest one for IT companies with muted growth, albeit no major surprises are expected. This is on the back of gradual reversal of furloughs and lower discretionary tech spends.

For the three months ended March, largecap IT companies are seen reporting mixed numbers. While analysts pegged Tata Consultancy Services (TCS) and HCLTech to lead the industry in terms of growth, their close competitor ' Q4 growth may still be under pressure due to continued impact of cut in discretionary tech spending and project ramp downs.

FPI Flows
While markets have kickstarted FY25 on a good note, foreign investors took some money back home from Dalal Street. In the week ended April 4, FPIs net sold stocks worth Rs 1,822 crore in the secondary market, according to StockEdge.

"There have been big swings in US bond yields this year in response to expectations regarding rate cuts by the Fed. The year started with market discounting six rate cuts in 2024 and consequently the yields drifted down. Then the market started factoring in only three rate cuts since the US labour market continued to be tight,” said V K Vijayakumar, Chief Investment Strategist, .

Now, many experts think that there may be only two rate cuts and these will be back loaded in 2024. Consequently, the US 10-year yield has spiked to 4.4%, which will impact FPI flows into India in the near term, Vijayakumar said.

However, FPI selling will be limited despite the high US bond yields since the Indian is bullish and has been setting new records consistently, he added.

Watch
After a mega IPO of Bharti Hexacom to start the fiscal, the primary market will take a breather next week as no new mainboard IPOs are opening. However, the action continues in the SME segment as three companies gear up to launch their issues.

Even though there are no new IPO launches next week, the Street will see the listing of Bharti Hexacom's public offer, which received a healthy subscription of nearly 30 times.

Apart from Bharti Hexacom, five other SME companies, which launched their issues in the week gone by, will see their shares getting listed on the exchanges.

Technical Indicators
On Friday, the Nifty 50 ended flat at 22513.70 points, and clocked 0.8% weekly gains. On daily charts, it’s suggesting that the index is consolidating after a sharp run-up, which is a healthy sign.

“We expect the consolidation to break out on the upside and thus minor degree corrections should be bought into. On the upside, we expect levels of 22700 which is the upper end of the rising channel. On the downside crucial support is placed at 22400-22350,” said Jatin Gedia, technical analyst at Sharekhan by BNP Paribas.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)