Market outlook: Earnings, Fed rate decision major factors to watch out for

The ongoing quarterly earnings season, the RBI's special meeting and the US Fed interest rate decision are the major events that would dictate trends in market this week, analysts said

The ongoing quarterly earnings season, the Reserve Bank's special meeting of its rate-setting committee and the US Fed interest rate decision are the major events that would dictate trends in the equity market this week, analysts said.

Besides, auto sales numbers and macroeconomic data to be announced during the week would also influence trading in the equity market.

Purchasing Managers' Index (PMI) data for the manufacturing sector would be announced on Tuesday, while the services sector numbers are scheduled to come on Thursday.

"FOMC (Federal Open Market Committee) meeting, RBI MPC meeting, auto sales numbers and Q2 earnings will drive the market this week. The market will have an eye on the unscheduled RBI MPC meeting. We are heading toward the last batch of Q2 earnings, which will lead to stock-specific movement. October auto sales numbers will be important because they will tell us about festival demand," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

The Reserve Bank will hold a special meeting of its rate-setting committee on November 3 to prepare a report for the government on why it failed to keep retail inflation below the target of 6 per cent for three consecutive quarters since January.

The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will prepare the report on reasons for the failure to meet the inflation target as well as the remedial measures the central bank is taking to bring down prices in the country.

"Under the provisions of Section 45ZN of the Reserve Bank of India (RBI) Act 1934... an additional meeting of the MPC is being scheduled on November 3, 2022," RBI said in a statement on Thursday. Section 45ZN of the RBI Act deals with the failure to maintain the inflation target.

"This week is going to be critical for markets for multiple reasons. We have two important events viz the US Fed meet and a special MPC monetary policy review meet scheduled during the week. Besides, important high-frequency data i.e. auto sales will also be in focus," Ajit Mishra, VP - Research, Religare Broking Ltd, said.

As the earnings season would gain pace, prominent names like Bharti Airtel, Larsen & Toubro, Tata Steel, Sun Pharma, Hero MotoCorp, HDFC, Cipla and Titan will unveil their numbers along with several others, he added.

Strong traction in ongoing domestic earnings, FIIs turning buyers and positive domestic cues can lead the Nifty to reach 18,000/18,200 levels over the next few days, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said.

Last week, the 30-share BSE benchmark jumped 652.7 points or 1.10 per cent.