Macro data, Q1 earnings to drive mkts this week: Experts

Stock markets are expected to react to the disappointing industrial production and retail inflation data, which were announced after trading hours on Friday, setting the tone for the next few days.

 

Besides, investors will take cues from the next set of earnings results for the first quarter (Q1), April-June, 2013-14 and the wholesale price-based inflation data for June, to be released on Monday, market experts said.

 

Investors will be also governed by FIIs, rupee movement, crude oil prices and global cues, they added.

 

"Better-than-expected Infosys numbers and trade deficit data have lifted the sentiments and the positive momentum is likely to continue this week too," said Vikas Jain, Founder, Aditya Trading Solutions.

 

"However, depending upon the rupee's movement and WPI inflation, there could be some setbacks for this rally. Big-ticket corporate result announcements are scheduled this week and that may also drive the gain in equities," he added.

 

IT major Infosys had on Friday posted a near 4% increase in its consolidated net profit for the April-June quarter, meeting market expectations, even as the firm maintained a "cautiously optimistic" approach keeping its US dollar revenue guidance unchanged for this fiscal.

 

Investors are now looking forward to the Q1 numbers of blue-chip companies like HDFC Bank, TCS, Reliance Industries, Bajaj Auto and HDFC this week.

 

Meanwhile, in a clear signal that the Indian economy is not out of the woods yet, the key economic data released on Friday revealed contraction in industrial production and exports, coupled with near double-digit retail inflation.

 

While the IIP contracted by 1.6% in May, the lowest factory output in 11 months, the trade figures suggest 4.6% decline in exports in June.

 

The retail inflation inched up to 9.87% in June, mainly due to rise in vegetable and fruit prices.

 

However, the silver lining is the narrowing of the trade deficit as the recently released trade data has showed that trade gap narrowed to USD 12.2 billion in June as against 20.1 billion in the previous month.

 

"Both the IIP and CPI inflation prints are disappointing. But we believe that the rupee depreciation and recovery in global growth would eventually improve the outlook for exports in the medium term," said Lalit Thakkar, MD-Institution, Angel Broking.

 

Meanwhile, Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd said: "In coming sessions, 6,025 shall be a crucial deciding level for Nifty in the near term, and the index is likely to witness further buying above this level."

 

With Chinese macro-economic data scheduled this week, global events will also be an important factor.

 

The BSE 30-stock index, Sensex, gained 462.65 points or 2.37% last week to reach 19,958.47.