Indian benchmark indices ended with weekly declines of 1.4% amid growing tension between India and Pakistan. But a Saturday peace breakthrough between the two countries could calm the markets when they resume trade on Monday. A host of other important domestic and global events lined-up during the week, are also likely to impact the D-Street.
On Friday, Nifty declined 265.80 points or 1.1% to end the day at 24,008. Selling pressure was across sectors but more prominent in private banks, realty and energy stocks.
"Following a period of consolidation, Indian equity benchmarks experienced a sharp correction amid escalating geopolitical tensions between India and Pakistan, which fueled market volatility and triggered a shift toward risk-off sentiment. Geopolitical developments, particularly the ongoing tensions with Pakistan, will continue to remain in focus," Ajit Mishra, Senior Vice President, Research, Religare Broking said.
Markets will react to corporate earnings and macroeconomic data -- Consumer Price Index (CPI), Wholesale Price Index (WPI) and trade figures for exports and imports that are expected to be released on Monday, May 12, Mishra added.
Factors that are likely to impact movement when markets reopen this week:
1) India-Pakistan tension
The markets are expected to heave a sigh of relief after India and Pakistan agreed to a ceasefire on Saturday. The Director General of Military Operations (DGMO) will next talk on Monday at 1200 hrs.
The markets have remained jittery for the past three sessions amid a war-like situation between the neighbours following India’s strong response after the Pahalgam attack. In the early hours on Wednesday, May 7 India destroyed terrorist infrastructure in Pakistan and Pakistan Occupied Kashmir (PoK).
Also Read: As India-Pakistan conflict grows, here's how equity markets, GDP have navigated wars
2) Q4FY25 earnings
Over 511 companies will be announcing their quarterly earnings this week and the Street will be keeping a close track on them. Some of the big results expected during the week include Hero MotoCorp, Tata Steel, Tata Motors, ITC Hotels, Hyundai Motor India, Bharti Airtel, Bharti Hexacom and Eicher Motors.
The markets will also take cues from the earnings of Dr Reddy’s Laboratories and Swiggy which announced its Q4 results after market hours on Friday.
3) US Markets
Indian markets will also take cues from Wall Street which ended with declines on Friday. Dow 30 closed at 41,249.40, falling by 119.07 points or 0.29% while the S&P 500 finished 4.03 points or 0.07% lower at 5,659.91. Nasdaq Composite closed flat at 17,928.90.
4) FII / DII Action
Market actions will rely on how foreign institutional investors (FIIs) behave. On Friday, FIIs sold shares worth Rs 3,798.71 crore while the domestic institutional investors (DIIs) were net buyers at Rs 7,277.74.
5) Technical Factors
Commenting on the day's action, Rupak De, Senior Technical Analyst at LKP Securities said that Nifty traders appeared to embrace risk-off trades amid India-Pakistan tensions on Friday, as the index fell from its recent consolidation zone. The index managed to stay above the 24,000 mark as the index found support around the 21-day exponential moving average (EMA), he said.
"In the short term, bears may attempt to push the index decisively below 24,000 to gain the upper hand. A clear break below 23,900 could increase bearish bets in the market. On the upside, 24,250 may act as an immediate resistance level, above which sentiment could improve," De said.
Also Read: Nifty ends week down 1.4% amid India-Pakistan tensions; 5 technical cues for next week
6) Rupee Vs Dollar
The Indian rupee ended stronger on Friday, gaining 34 paise to close at 85.37 per dollar, even as the military tensions between India and Pakistan intensified. The rupee appreciated from a low of 85.84 per dollar during the day amid likely intervention by the Reserve Bank of India, traders said. The rupee earlier closed at 85.71 to the dollar.
The one-month dollar rupee non-deliverable forwards (NDF) segment climbed to their highest in a month on Friday, according to Reuters, emphasising offshore market participants’ concerns about rupee weakness.
The intervention by RBI in the form of dollar sales was high, and the central bank ensured the rupee did not fall beyond the 86/$1 mark.
“The RBI likely did not allow a spike in the currency pair beyond 86 and ensured that the dollar-rupee stays in a band, giving importers and exporters equal opportunity to hedge,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Traders expect the rupee to be in the range of 84.5/$1 to 86/$1 on Tuesday, subject to no serious escalations between India and Pakistan.
7) Corporate action
Over two dozen companies will have some or the other corporate action next week including record dates for dividends, demerger, rights issue falling over the five-day trading week. Some of the prominent events are record dates for dividends of State Bank of India (SBI), Indian Energy Exchange (IEX) and GRSE.
Read More: Corporate actions: SBI, BSE and BEML among 11 stocks with record dates next week. Do you own any?
8) Crude Oil
Crude oil prices remain critical for the stock markets as they have the potential to alter the inflation dynamics in a country.
The US WTI oil contracts ended at $61.06, up by $1.15 or 1.92% while Brent oil futures were hovering near $63.910, higher by $1.04 or 1.65%.
9) Macro data
India will publish its Consumer Price Index (CPI), Wholesale Price Index (WPI) and trade figures for exports and imports on Monday, May 12.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
On Friday, Nifty declined 265.80 points or 1.1% to end the day at 24,008. Selling pressure was across sectors but more prominent in private banks, realty and energy stocks.
"Following a period of consolidation, Indian equity benchmarks experienced a sharp correction amid escalating geopolitical tensions between India and Pakistan, which fueled market volatility and triggered a shift toward risk-off sentiment. Geopolitical developments, particularly the ongoing tensions with Pakistan, will continue to remain in focus," Ajit Mishra, Senior Vice President, Research, Religare Broking said.
Markets will react to corporate earnings and macroeconomic data -- Consumer Price Index (CPI), Wholesale Price Index (WPI) and trade figures for exports and imports that are expected to be released on Monday, May 12, Mishra added.
Factors that are likely to impact movement when markets reopen this week:
1) India-Pakistan tension
The markets are expected to heave a sigh of relief after India and Pakistan agreed to a ceasefire on Saturday. The Director General of Military Operations (DGMO) will next talk on Monday at 1200 hrs.
The markets have remained jittery for the past three sessions amid a war-like situation between the neighbours following India’s strong response after the Pahalgam attack. In the early hours on Wednesday, May 7 India destroyed terrorist infrastructure in Pakistan and Pakistan Occupied Kashmir (PoK).
Also Read: As India-Pakistan conflict grows, here's how equity markets, GDP have navigated wars
2) Q4FY25 earnings
Over 511 companies will be announcing their quarterly earnings this week and the Street will be keeping a close track on them. Some of the big results expected during the week include Hero MotoCorp, Tata Steel, Tata Motors, ITC Hotels, Hyundai Motor India, Bharti Airtel, Bharti Hexacom and Eicher Motors.
The markets will also take cues from the earnings of Dr Reddy’s Laboratories and Swiggy which announced its Q4 results after market hours on Friday.
3) US Markets
Indian markets will also take cues from Wall Street which ended with declines on Friday. Dow 30 closed at 41,249.40, falling by 119.07 points or 0.29% while the S&P 500 finished 4.03 points or 0.07% lower at 5,659.91. Nasdaq Composite closed flat at 17,928.90.
4) FII / DII Action
Market actions will rely on how foreign institutional investors (FIIs) behave. On Friday, FIIs sold shares worth Rs 3,798.71 crore while the domestic institutional investors (DIIs) were net buyers at Rs 7,277.74.
5) Technical Factors
Commenting on the day's action, Rupak De, Senior Technical Analyst at LKP Securities said that Nifty traders appeared to embrace risk-off trades amid India-Pakistan tensions on Friday, as the index fell from its recent consolidation zone. The index managed to stay above the 24,000 mark as the index found support around the 21-day exponential moving average (EMA), he said.
"In the short term, bears may attempt to push the index decisively below 24,000 to gain the upper hand. A clear break below 23,900 could increase bearish bets in the market. On the upside, 24,250 may act as an immediate resistance level, above which sentiment could improve," De said.
Also Read: Nifty ends week down 1.4% amid India-Pakistan tensions; 5 technical cues for next week
6) Rupee Vs Dollar
The Indian rupee ended stronger on Friday, gaining 34 paise to close at 85.37 per dollar, even as the military tensions between India and Pakistan intensified. The rupee appreciated from a low of 85.84 per dollar during the day amid likely intervention by the Reserve Bank of India, traders said. The rupee earlier closed at 85.71 to the dollar.
The one-month dollar rupee non-deliverable forwards (NDF) segment climbed to their highest in a month on Friday, according to Reuters, emphasising offshore market participants’ concerns about rupee weakness.
The intervention by RBI in the form of dollar sales was high, and the central bank ensured the rupee did not fall beyond the 86/$1 mark.
“The RBI likely did not allow a spike in the currency pair beyond 86 and ensured that the dollar-rupee stays in a band, giving importers and exporters equal opportunity to hedge,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
Traders expect the rupee to be in the range of 84.5/$1 to 86/$1 on Tuesday, subject to no serious escalations between India and Pakistan.
7) Corporate action
Over two dozen companies will have some or the other corporate action next week including record dates for dividends, demerger, rights issue falling over the five-day trading week. Some of the prominent events are record dates for dividends of State Bank of India (SBI), Indian Energy Exchange (IEX) and GRSE.
Read More: Corporate actions: SBI, BSE and BEML among 11 stocks with record dates next week. Do you own any?
8) Crude Oil
Crude oil prices remain critical for the stock markets as they have the potential to alter the inflation dynamics in a country.
The US WTI oil contracts ended at $61.06, up by $1.15 or 1.92% while Brent oil futures were hovering near $63.910, higher by $1.04 or 1.65%.
9) Macro data
India will publish its Consumer Price Index (CPI), Wholesale Price Index (WPI) and trade figures for exports and imports on Monday, May 12.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
You may also like
Why are judges in US getting pizzas that they didn't even order?
BREAKING: Nottingham Forest owner storms pitch and fumes at Nuno Espírito Santo after Leicester draw
Fairground terror as waltzer car hurtles off tracks while families scream
Man Utd's season hits new low as Ruben Amorim suffers big blow in West Ham loss - 5 talking points
Punjab: Schools in five border districts, Sangrur to remain shut on May 12
