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New Delhi: Domestic equity markets ended the week on a poor note, tracking the volatility in the global markets led by rate hikes by central banks and sharp selloff from the global investors.

Benchmark indices – BSE Sensex and Nifty50 – dropped 4 per cent followed by a 7 per cent fall in midcap and smallcap stocks. All the major sectors witnessed a selloff, including a 9 per cent fall in consumer durable index.

Markets ended a two-week long consolidation phase and dropped sharply, pressurized by weak cues, said Ajit Mishra, VP Research. Religare Broking.

“The tone was negative from the beginning and a surprise rate hike from the RBI pushed the bulls on the back foot,” he added. “Sentiment further dampened in the final session due to increasing fear of aggressive rate hikes from the US Fed.”

In the upcoming week, various global factors such as inflation numbers from US and China, War crisis between Russia and Ukraine and commentary from Fed members’ will guide the markets.

Back home, investors’ will track India’s inflation numbers and industrial output, followed by ample action in the primary markets including LIC‘s IPO, three new issues and two listings.

“In this range-bound market, it is advised to stick with sectors that are expected to be least impacted by inflation & yield rise like banking, IT, pharma, and themes like green energy,” Vinod Nair, Head of Research at Geojit Financial Services.

Below are 10 key factors that may steer markets next week:

Inflation numbers

Inflation data will be the key focus in the coming week with figures due for the month of April from both the US and China, the two biggest economies in the world.

A series of Fed appearances will also be anticipated following the May Fed FOMC meeting, as will US consumer sentiment data. Meanwhile, China releases a series of data including trade data against the backdrop of lingering Covid-19 disruptions.

Industrial Output

India will also report its industrial production for the month of March 2022, which gauges the change in the total inflation-adjusted value of output manufacturers, quarries, and utilities produced.

The numbers will be quite important for the street amid the crisis of energy and coal and rising prices of commodities across the globe. The outlook remains bleak, the industry experts said.

India’s CPI Inflation

India will report its consumer price index (CPI) numbers for April in the upcoming week. This becomes crucial as RBI Governor Shaktikanta Das surprisingly raised the interest rate by 40 basis points last week, citing the rising inflationary worries. The latest inflation reading will hint about RBI’s stance in the next monetary policy meeting.

Economists believe that it may have been in the range of 7.4-7.5 per cent in April. India‘s retail inflation surged to 6.95 per cent in March 2022, the highest since October 2020.

War Crisis

The situation in war-hit Ukraine and Russia remains tense, which is hurting the traders across the globe. Also, Russia celebrates May 9 as its Victory Day, which is being remarked as a very important date. Any news that de-escalate tensions, would be welcomed by the markets.

Q4 Earnings

The earnings sessions for the fourth quarter will be in full swing in the upcoming week as bluechips counters including UPL, Asian Paints, Cipla, Adani Ports, Tata Motors, Larsen & Toubro and Tech Mahindra will announce their numbers for March 2022 quarter.

Other key companies including Hindustan Aeronautics, Bandhan Bank, Siemens, Punjab National bank, Petronet LNG, Indian Bank, Polycab India, Gujarat Gas, Dalmia Bharat and Vedant Fashions are among other names to report their Q4 earnings.

Reliance Results

The street will react to the March quarter earnings of oil-to-telecom behemoth, Reliance Industries, which reported a 22.50 per cent year-on-year (YoY) rise in consolidated net profit at Rs 16,203 crore compared with Rs 13,227 crore in the same quarter last year.

Revenue from operation rose 36.79 per cent YoY to Rs 211,887 crore compared with Rs 154,896 crore in the corresponding quarter last year. The company board has recommended a dividend of Rs 8 per share.

Three IPOs

Three initial stake sales including Delhivery, Prudent Corporate Advisory Services and Venus Pipes & Tubes will be launched in the upcoming week. The trio will be raising close to Rs 6,000 crore from the investor via primary offering.

Delhivery’s Rs 5,235-crore IPO will be open for subscription between May 11-13 in the fixed price band of Rs 462-487 per share, whereas Venus Pipes & Tubes will raise Rs 165.4 crore by selling its shares in the range of Rs 310-325. Both issues will be open between May 11-13.

Prudent Corporate Advisory Services’ IPO will be open for subscription between May 10-12 and the company will sell its shares in the range of Rs 595.630 apiece.

Two Listings

Amid the ample action in the primary markets, two companies – Campus Activewear and Rainbow Children‘s Medicare – will make their debut on the bourses in the upcoming week.

The athleisure footwear brand, Campus Activewear, raised Rs 1,400.14 crore through its initial public offering between April 26-28. The company sold its shares in the range of Rs 278-292. It is likely to be listed on Monday, May 9.

Rainbow Children’s Medicare, a multi-speciality pediatric, obstetrics and gynaecology hospital chain is expected to be listed on May 10. The company sold its shares between April 27-29 in the range of Rs 516-542 apiece to raise Rs 1,580.85 crore.

Final Day of LIC’s IPO

The much buzzed initial public offering (IPO) of Life Insurance Corporation (LIC) of India will conclude for subscription on Monday. The largest ever issue of Indian primary market, raising about Rs 20,557 crore for 3.5 per cent stake of government, was open for subscription on Weekends too.

However, investors will keenly watch the bids from qualified institutional buyers (QIBs) and non institutional investors (NIIs) who rush to the streets on the last day of the bidding process.

Technical Outlook

After consolidating for two weeks in a range, Nifty50 closed sharply lower and formed a big bearish candle. The index is now trading just at the previous support of 16,400, said Yesha Shah, Head of Equity Research, Samco Securities.

“The short-term trend has turned bearish and it is likely that markets can further slide lower. Having said this, if we look at the larger picture, the benchmark index has been trading mostly in a wider range of 16,400 to 18,400 since October. Therefore, a bounce from current levels also cannot be ruled out,” he added, advising investors to avoid fresh shorts at current levels.


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