Key economic data, Q1 earnings in focus

The outcome of the US jobs report and data on WPI, CPI, IIP would dictate trend

Key economic data in addition to the trends in US jobs and first quarter earnings from Infosys would be the key market drivers.

In the week to July 8, markets witnessed consolidation to end flat as focus shifted to the broader markets. The S&P BSE Sensex ended down 18 points at 27,127 while the Nifty50 settled 5 points lower at 8,323.  

“Markets remained range bound last week, consolidating after the recent rise and are now awaiting the next major trigger. The coming week will see the earnings season kick in. Also, progress of monsoon and the fate of GST will be in focus. Besides, global cues will continue to influence our markets. Overall the market will continue trending up.” said Jayant Manglik, President - Retail Distribution, Religare Securities.

India's services PMI fell to a seven-month low of 50.3 in June as compared to the previous month of May as new business grew at its slowest pace in the previous 11 months, a business survey showed.

In the political front, PM Narendra Modi inducted 19 new ministers into the Council of Ministers. Government sources said the move will strengthen the Modi-led team with “experience, expertise and energy”.

Jaypee Group shares recorded top gains after UltraTech Cement announced that its board has approved the acquisition of the Jaypee Group’s cement plants at an enterprise value of Rs 16,189 crore. Jaiprakash Associates zoomed 32%, Jaiprakash Power Ventures jumped 18% and Jaypee Infratech surged 15%.

Fertilisers companies took a hit after the government announced reduction in prices of key fertilizers such as di-ammonium phosphate and muriate of potash. Coromandel International lost 11% while Deepak Fertilisers and Zuari Agro lost over 4% each.

Lupin was the top Sensex gainer to end nearly 6% higher after the company in a release today said that it has received an Establishment Inspection Report from the USFDA which had inspected its Goa facility in July 2015. Among other pharma majors, Dr Reddy's Labs, Cipla and Sun Pharma ended up 2% each.

Tata Steel was also in focus during the week amid reports that Britain's decision to exit the European Union would pose a hurdle in its plans to sell off its loss-making UK assets.

 
Outlook

L&T will be in focus with its IT subsidiary L&T Infotech's IPO in the price band of Rs 705-Rs 710 will open from July 11 and close on July 13.

The government will release data on consumer price inflation for June and industrial production for April 2016 on July 12. Data on wholesale price inflation is scheduled for release on July 14.

Infosys will kick off the first quarter earnings season on Friday, July 15.