Investors should keenly track the monetary policy outcome which is due on coming Friday
Last week the market movement was range-bound. In the process, the markets ended lower for the second consecutive week. The negative sentiments were owing to weak and volatile mainly because of fear of Delta variants and uncertainty in global markets. The S&P Sensex was down by 0.70 per cent and Nifty 50 by 0.60 per cent. Bank Nifty was down by 3.1 per cent mainly due to inflationary pressure whereas the IT sector was up by 2 per cent. Nifty metal outperformed the market mainly because of decent quarterly earnings and heavy demand in this sector.
In the coming week, indices are expected to remain range-bound. Investors should keenly track the monetary policy outcome which is due on coming Friday. The overall expectation of positive June quarter earnings of the various sectors can move the market in a sanguine direction and investors can expect at least 100 point movements.
Also, a global investor (FII) is a seller in the market and sold equities worth Rs 10,825 crore which indicates that the confidence in our market is low and thus the market may move in a downward direction. Overall in the month of July, FIIs sold equities worth Rs 23,193 crore, while DIIs bought equities worth Rs 18,393 crore.
Major Events in the Coming Week
Quarterly, June earnings of NTPC, Housing Development Finance Corp, Adani Ports , Bharti Airtel, Shipping Corp of India, Tata Consumer Products, Titan Co, Cipla, BEML, Bharat Electronics, Hindalco Industries, National Aluminium Co ,Hindustan Petroleum and Tata Power Co will report their Apr-Jun numbers over the weekend and next week. So investors should keep a watch on these stocks.
The IT sector will continue to see positive momentum because of positive earnings and robust demand. Investors who are risk-averse can buy quality stocks and they will fetch decent returns in the short run and long run. Investors with a risk appetite can also see Zomato which has fallen at the end of the week and will reverse in the coming days because of the increase in demand and easing of restrictions.
Last week, the stock couldn’t get momentum mainly due to the June quarter hit as the claim payouts increased because of covid cases. However, the recently introduced disinvestment bill by our finance minister will give a boost to the sector. Insurance penetration and insurance density in India is very low as compared to international standards.
This sector looks a little bearish because of the low earning expectation. From the last two weeks, the volatility in this sector was high mainly because of the mixed results of different banks. Also the earning can be low which affects the valuation owing to an increase in NPA and a fall in asset quality. Investors can have a look at RBL and Punjab National Bank will report their quarterly results on Monday.
Last week, this sector gave a positive return to the investor and the coming week also looks good. Investors should watch Jindal Steel and Power, Tata Steel, and SAIL as these stocks are showing positive directions. The sector is booming because the Chinese Government has announced imposing more restrictions on steel products and raising export traffic.
Also, investors should look at CDSL and CAMS. CDSL is one of the two depositories in India and the only listed one in the country and they have added more than four crore Demat accounts which in turn will add good revenue for the organisation. CAMS, on the other hand, is a transfer agent with an aggregate market share close to 70 per cent based on Average Asset Under Management. Growth in the capital market is adding more and more investment in mutual funds which in turn will add to the revenue to the organisation .
The author is an Assistant Director at ITM B-School
DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.