There could be a rise in the stock market during the Diwali week starting October 28. Quarterly company results, global and domestic economic data, including geopolitical tensions, will determine market developments. According to experts, the buy-the-dip strategy is expected to be adopted in the market this week.
Last week, the Sensex fell 2.24% to close at 79,402, below the psychological level of 80,000, while the Nifty fell 2.7% or 673 points to 24,181. 8% compared to the record of September 27.
The Nifty Midcap 100 index fell 5.75% and the Smallcap 100 index fell 6.5%. Stocks of banks, FMCG, automobiles, pharmaceuticals, metals, oil and gas and real estate fell 2.5-7% during the week.
1. Quarterly corporate results: Adani, Maruti to release results
This week, around 400 companies will release their July-September quarter results, including companies like Bharti Airtel, Sun Pharmaceutical Industries, Adani Enterprises, Adani Ports and Special Economic Zone, Cipla, Maruti Suzuki and Larsen & Toubro. Apart from this, results of non-Nifty 50 companies Adani Power and Ambuja Cement will also be released.
2. Indian and foreign investors: FIIs sold shares worth ₹20,000 crore
Last week, foreign institutional investors (FIIs) saw a net sale of shares worth over Rs 20,000 crore in the cash segment. Due to this, the total net sales in October crossed Rs 1 lakh crore, representing the highest monthly outflow so far.
However, in the same week, domestic institutional investors (DIIs) bought shares worth Rs 22,915 crore, taking it to Rs 97,091 crore in October. The Indian rupee remained at 84 level against the US dollar for the fourth consecutive week.
3. Global economic data: US unemployment rate
Data on GDP growth, PCE prices and real consumer spending for the July-September period will be available. The US economy grew by 3% between April and June this year. Apart from this, monthly unemployment rate data will also be available. It was 4.1% in September.
All of this data is important in the run-up to the Federal Open Market Committee’s November 8 interest rate decision. At the last meeting, the Federal Reserve cut interest rates by 50 basis points.
4. National economic data: data on foreign exchange reserves
Final manufacturing PMI data for October will be released on November 1. Preliminary estimates during the month indicated that the HSBC India Manufacturing PMI rose to 57.4 for October from 56.5 in September.
Apart from this, investors will also keep an eye on infrastructure output data on October 30 and fiscal deficit data on October 31. Foreign exchange reserves data for the week ending October 25 will be released on November 1.
5. Geopolitical tension: the Israeli attack on Iran
Israel responded to Iranian attacks in the early hours of Saturday, 25 days later. According to the New York Times, 20 targets were attacked in 3 hours. These include missile factories and military bases. An attack also took place near Tehran’s “Imam Khomeini International Airport”. The attacks began at 2:15 a.m. local time and continued until 5 a.m.
Oil and nuclear infrastructure were not targeted in these attacks on Iran, resulting in a drop in crude oil prices. Lower crude oil prices generally reduce transportation costs. Its positive effect is visible on the stock market. Last week, the price of Brent crude rose 4% to $76.05 per barrel. A week earlier, prices fell 7.6%.
The stock market has fallen for five consecutive days
The stock market was down for the fifth consecutive day on October 25. Sensex closed at 79,402 with a decline of 662 points (0.83%). Nifty also fell by 218 points (0.90%), it closed at the level of 24,180. At the same time, the BSE Small Cap fell by 1,307 points (2.44%).
Out of 30 Sensex stocks, 20 fell and 10 rose. Out of 50 Nifty stocks, 38 fell and 12 rose. Except FMCG and healthcare indices, all sectors closed lower. Nifty Consumer Durables fell the most by 2.52%.