IIP data, Q1 earnings and Zomato IPO among key factors that may guide market this week

New Delhi: The domestic equity market had a volatile week as the benchmark indices ended in red. On a weekly basis, BSE Sensex and Nifty50 shed 0.2 percent each as investors booked profits in IT, auto and oil & gas counters.

“It is a buy-on-dips kind of market. So buying was seen at lower levels and that gave support to the market. Immediate support and resistance for Nifty50 are at 15,600 and 15,800, respectively,” said Mohit Nigam, Head, PMS, Hem Securities.

The market has turned cautious on the back of dampened global cues. Rising number of Covid-19 cases throughout the globe jittered hopes of a swift economic recovery.

This week, the market would take cues from earnings announcements and macroeconomic data like IIP, CPI and WPI inflation. Besides, global cues, monsoon progress and updates on the new COVID variant will be closely monitored by investors.

IIP and Inflation data
India will release its industrial output and fiscal deficit for June this week. India’s index of industrial production (IIP) is likely to show an increase on a year-on-year basis due to a base effect. However, market experts are likely to focus on the monthly index, compared to yearly numbers.

Industrial output in India had expanded for the second consecutive month in April 2021 owing to a low base effect because of the Covid-19 induced lockdown that hit economic activities last year. IIP rose by a sharp 134 per cent in April 2021, as per data from the National Statistical Office (NSO).

Also, inflation numbers would be on the radar of investors. Rising crude oil prices and weak rupee have impacted wholesale and consumer inflation. Petrol has crossed Rs 100 per litre in most major cities, while diesel is inching closer to the Rs 100 mark.

Q1 Earnings
India Inc is entering the first leg of June quarter earnings, which was mostly impacted by the lockdown and restrictions imposed by local authorities to curb the widespread second wave of Covid-19.

Companies like Infosys, Wipro, HDFC AMC, MindTree, HFCL, Tata Metaliks, L&T Technology Services, Hatsun Agro Products, Craftsman Automation, Dodla Dairy, L&T Infotech, Cyient, L&T Finance Holdings and Tata Elxsi would announce their numbers along with several others.

Zomato IPO
The much-awaited IPO of Zomato will hit the primary market on Wednesday, July 14. The company will raise Rs 9,375 crore through its public offering. It has set the offer price for its public offering at Rs 72-76 a share.

The issue, which closes on 16 July, comprises an offer for sale of Rs 375 crore by the company’s early investor Info Edge and a fresh issue worth Rs 9,000 crore.

Rise of delta variant
The rising spread of delta variant of Covid-19 virus has spooked global financial markets. The markets have seen a risk-off move owing to rising concerns over the spread of the Delta variant of Covid-19 and concerns over a economic slowdown in China.

Investors are likely pricing in the growing spread of the new mutant across the world and signs of slowdown in the Chinese economy, said renowned British economist Jim O’Neill.

Pace of monsoon
The India Meteorological Department (IMD) said the southwest monsoon has revived, with easterly winds intensifying and covering parts of Punjab, Haryana, Delhi, Uttar Pradesh, and Rajasthan. A low pressure area is likely to form over west-central and adjoining northwest Bay of Bengal coasts.

The IMD also said lower level easterly winds from the Bay of Bengal have extended northwestwards, making conditions favourable for the further advancement of the monsoon.

Technical Outlook
“Nifty50 closed on a mildly negative note for the week, but it is still trading in a range-bound manner. The index has established short-term support at the 15,500 zone, a break of which will raise a red flag to the ongoing uptrend. This might trigger a profit-booking move and possibly short-term weakness in the market,” said Nirali Shah, head of Equity Research, Samco Securities.

“Until then we suggest traders maintain a bullish bias, keeping a stop loss below 15,440. Immediate resistance is now placed at 15,900,” she added.

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