 "BSE, stock market, sensex")
Benchmark equity indices in India recorded sharp losses last week in the backdrop of rising geopolitical crisis, mainly the Iran-Israel escalation and fears of a prolonged period of higher interest rates in the US.
The S&P BSE Sensex tested the 71,000-mark, while the Nifty plunged below the 22,000-mark amid the sell-off, before recouping some losses on Friday. Eventually, the benchmark stock market indices ended with losses of around 1.7 per cent in the week ended April 19.
Technically, the market seemed precariously poised given the sharp fall from record highs.
As far as levels are concerned, the psychological mark of 22,000 withholds the intermediate support, followed by the strong support of the 21,800-21,700 subzone, said Osho Krishan, Sr. Analyst - Technical & Derivative Research of Angel One in a note.
On the higher side, the 20-DEMA placed at 22,300, followed by a bearish gap of 22,430-22,500, is likely to act as a daunting task in the near period and an authoritative breakthrough could only re-strengthen the lost momentum to the bulls of D-Street, the note from Osho added.
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Heavyweights in focus: After market hours on Friday, HDFC Bank came out with its Q4 results. The stock is expected to react to the numbers today.
HDFC Bank - the private sector lender reported 37.1 per cent YoY growth in net profit for the quarter ended 31 March 2024 at Rs 16,512 crore. Net interest income grew by 24.5 per cent to Rs 29,080 crore.
Reliance Industries to announce Q4 results today. That apart, Aditya Birla Money, Hatsun Agro, Kesoram Industries, Rallis India, Tejas Network, Tamilnad Mercantile Bank are few of the notable companies scheduled to report earnings on Monday.
Result preview: O2C may be a dampener on Reliance Industries earnings
Global cues
At 08:00 AM, Gift Nifty futures quoted around 22,270, hinting at an over 100 points gap-up to the NSE benchmark Nifty 50 index.
Elsewhere in Asia, Japan’s Nikkei was up 0.6 per cent. Hang Seng rallied over 2 per cent. Kospi and Straits Times surged over 1 per cent each.
Over the weekend, the US market ended on a mixed note, with Dow Jones up 0.6 per cent. Nasdaq, however, cracked 2 per cent and the S&P 500 0.9 per cent on Friday owing to sell-off in technology shares led by Netflix.
The 10-year US bond yield quoted near 4.657 per cent its highest level in five months. Among commodities, Gold quoted near 2,400 per ounce mark, while Brent Crude Oil was off the recent highs around $87 per barrel.
A potential delay in the US rate cut due to higher-than-expected inflation, robust retail sales, and elevated oil prices have invoked subdued sentiments. Going ahead, GDP, PMI, and jobless claims data from the US next week will provide further insights into the Fed's policy, said Vinod Nair, Head of Research, Geojit Financial Services in a note.
Lok Sabha elections: Phase 1 of the general elections in India concluded on Friday, the election season will conclude on June 01 with results scheduled to be announced on June 04.
The market has factored in close to 350 seats for the BJP and almost 400 seats for the NDA. However, if the ruling government gets 50 seats fewer, there will be a market correction, states a report by global research and brokerage firm Bernstein.
Iran-Israel conflict: Developments over the ongoing crisis in the Middle-East will continue to guide market sentiment globally, as any escalation in the war would have adverse impact on Crude Oil prices.
Further, Corporate India is already showing early signs of stress owing to longer deliveries, doubling freight rates, extended working capital cycles, and higher costs.
FPIs: As bond yields quote at five-month highs, and hopes of interest rate cut in June/ July dim, last week witnessed the worst bout of selling by foreign portfolio investors (FPIs) in 2024. In the four trading sessions, FPIs pulled out Rs 18,600 crore.
Apart from the bond yields and geopolitical crisis, another trigger for FPI selling was the tweak in India's tax treaty with Mauritius, which would now impose higher scrutiny on investments made in India via the island nation
