In a holiday-shortened trading week, the Indian stock market exhibited resilience, with key indices ending on a high note despite underlying volatility. The BSE Sensex nearly touched the 74,750 mark, while the NSE Nifty closed at 22,660.95, reflecting cautious optimism among investors.
This week is marked by the observance of Eid-Ul-Fitr, leading to a shorter trading window and prompting market participants to keep a close watch on global trends, domestic macroeconomic announcements, currency fluctuations, and investors’ activities for direction.
Stock Market Performance in the Previous Week
The stock market navigated through significant volatility last week but closed slightly higher. The S&P BSE Sensex ended the session at 74,248, registering a gain of approximately 21 points. Concurrently, the NSE Nifty50 increased by 1 percent to close trading at 22,514. This performance underscores the market’s resilience and the cautious optimism prevailing among investors, despite the fluctuations seen throughout the week.
Earnings Season Kick-off
The upcoming week marks the beginning of the earnings season for Indian companies for the January to March quarter of the 2023-24 fiscal year. TCS, a behemoth in IT services, is slated to unveil its Q4 earnings on Friday, setting the tone for the earnings season. Additionally, India’s inflation data for March is expected to be released in the latter half of the week, providing critical insights into the economic landscape and potentially influencing market sentiment.
Industry Expert Outlook
Santosh Meena, Head of Research at Swastika Investment Ltd, offered his perspective on the week ahead, indicating a significant phase for Indian companies. “Indian companies are set to enter a new corporate earnings Q4 season this week, with IT services giant TCS leading the pack. After market trading hours, its results for the fourth quarter of FY24 will be announced on April 12, 2024. Additionally, India’s industrial production data and inflation figures for March will be declared on the same day, marking critical economic updates.”
Foreign Portfolio Investors (FPIs) Activity
In April, Foreign Portfolio Investors (FPIs) reversed their investment trend in Indian equities, withdrawing Rs 325 crore from the segment. This shift reflects the investors’ cautious approach amidst relatively high valuations and the anticipation of the upcoming general elections.
Despite this cautious stance in equities, FPIs displayed bullish sentiment towards the Indian debt market, injecting Rs 1,215 crore as of April 5, 2024. The overall inflow from FPIs into Indian equities stood at over Rs 10,500 crore, with the debt market seeing an infusion of more than Rs 57,000 crore this year.
Factors Influencing the Market This Week
A mix of global and domestic factors will influence this week’s stock market. International market trends, especially those from major economies, will likely impact investor sentiment. Domestically, macroeconomic announcements, including inflation data and corporate earnings reports, are anticipated to be key drivers of market movements. Additionally, currency fluctuations and the activities of investors, both domestic and international, will play a crucial role in shaping market dynamics.
Market Outlook for the Upcoming Week
With the beginning of the earnings season and significant economic data on the horizon, the market outlook for the coming week is cautiously optimistic. Investors will keenly watch the earnings announcements from TCS and other major companies, as these could soon set the tone for the market. The release of inflation data and industrial production figures will also provide valuable insights into the health of the Indian economy, potentially influencing market trends.
As the Indian stock market enters a holiday-shortened trading week, all eyes are on global trends, domestic macroeconomic announcements, and the beginning of the corporate earnings season. Despite the challenges posed by volatility and cautious investor sentiment.
The market’s resilience is evident in the closing figures of key indices. With critical economic data releases and earnings reports on the horizon, the market is at a pivotal juncture, and its direction could have significant implications for investors and the broader economic landscape.
