Domestic Bonds

Stock Market Movements: Top 10 Factors That May Lead To Action On D-Street Next Week

Indian stock markets fell on Friday amid a sell off, fear of Omicron covid variants and weak global indices. The national stock benchmarks Nifty50 and S&P BSE Sensex suffered a correction of more than one percent each, dragged down by Reliance Industries, Asian Paints and bank stocks.

The Nifty50 finished more than 200 points or 1.18% lower at 17,196.70 as only 12 stocks rose and 38 fell on the index. Likewise, the BSE Sensex corrected over 750 points or 1.31% to 57,696 as only three stocks were in the green and 27 finished negative on the 30-stock Sensex.

“Concerns about the new Omicron variant, rising global inflation, and the Fed’s remarks on the anticipated cut continued to fuel volatility in the market. Positive domestic macroeconomic data supporting economic growth helped boost investor sentiment in the first half of the week. However, feelings were reversed towards the end of the week amid growing concerns over Omicron as India reported cases, ”said Vinod Nair, research manager at Geojit Financial Services.

There will be several factors that will stimulate action on Dalal Street next week. We list 10 of these factors:

1. Omicron covid fear variant

It is one of the factors that not only caused panic in India, but also dragged down markets around the world. India’s count of the Omicron variant of COVID-19 reached four after a new case was detected in Maharashtra, the PTI news agency said. Indian markets showed a knee-jerk reaction on Friday after the detection of a case of the Omicron variant in India.

2. RBI Monetary Policy Meeting

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) meeting is scheduled to take place December 6-8, 2021. The meeting is growing in importance as it comes against the backdrop of the omicron variant of Covid and strong inflationary pressures.

“The RBI monetary policy meeting scheduled to begin next week will be a key market driver in the coming days as investors await the MPC’s policy decision given the uncertainty surrounding the new virus that persists in the industry. The much-anticipated MPC decision will be whether they will wait for another session and assess the impact of Omicron in deciding to hike reverse repo rates, ”said analyst Nair.

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3. Primary market (IPO)

There are up to four IPOs lined up to open next week, while Anand Rathi’s IPO will close on Monday. The four IPOs that will open next week are: RateGain Travel Technologies, Shriram Properties, CE Info Systems (MapmyIndia) and Metro Brands, a company backed by Rakesh Jhunjhunwala. Another IPO of Jhunjhunwala-backed Star Health & Allied Insurance company, which was underwritten just 0.79 times, is also expected to go public on December 10.

4. National data

Inflation data for November and industrial and manufacturing production data for October are also expected for next week.

“From a domestic perspective, the main data points awaiting release in the coming week are November inflation data, which is expected to remain high, and October industrial and manufacturing production data.” Nair added.

5. FII data

Foreign institutional investors remain net sellers so far this month. The FII were net sellers to the tune of Rs 7,031.72 crore during the three days from December 1 to December 3. The FII withdrew over Rs 1,648.79 crore from the cash segment of Indian stock markets on Friday, December 3, 2021 – alone.

6. Global markets

The performance of the US and Asian markets over the coming week will also determine the mood of the domestic stock markets. All major Asian and Wall Street indices closed in the red on the last trading day of the week Friday amid several factors, including the Omicron covid variant, the Fed chairman’s commentary on the buyout program. obligations and US employment data in November.

7. Winter session of Parliament

About 20 bills, including the cryptocurrency bill, are due to be introduced in the winter session of Parliament which began on November 29. The session will end on December 23, and the markets will be watching closely for any bills that could have a direct impact on the stock market. .

8. Securities transactions

Major corporate actions are likely to decide market sentiment on any given day, as multiple companies’ registration date for dividends, bonuses and stock split is slated for next week. These are:

December 6: Coal India – Rs 9 per share ex-date is Monday. The registration date for the same is December 7.

December 7: Panchsheel Organics Ltd – The company approved the free allocation of shares in a ratio of 1: 1, ie one fully paid share for each fully paid share held. The departure date and check-in date for the same is December 7th.

December 9: Shivam Autotech Ltd – The ex-date for the issuance of rights to 2 shares for 9 shares held at Rs 18 per share is Thursday.

9. Bharat Bond ETF April 2032

The subscription of Bharat Bond ETF, which opened on December 3, will close on December 9, 2021. Bharat Bond ETF April 2032 is a 10-year product that will mature in April 2032. The bond offers a gross yield of 6, 87% and a provisional yield net of tax of around 6.4%. Bharat Bond ETF is an exchange traded fund listed on the NSE, which invests in public sector bonds.

10. Technical factors

The Nifty finished below 17,200, while the Sensex lost 765 points on Friday. Experts expect volatility and some correction in December. Nifty 50’s immediate support and resistance are 17000 and 17450, says Mohit Nigam, Head – PMS, Hem Securities. It places Bank Nifty support and resistance at 35,800 and 36,850.

“The index closed a week at 17197 with gains of over one percent and formed a sort of doji candle pattern on the weekly chart after two bearish candles that point to indecision in the markets. A good zone. Demand for Nifty has already formed around 17100-17000 & holding above said levels, the index can be expected to move up to the 17500-17600 area in the near term. not to maintain them, more reserve of earnings can push the index to much lower levels, the immediate hurdle is approaching the 17300-17440 area, “said Rohit Sigre, senior technical analyst at LKP Securities.

(Disclaimer: The views / suggestions / advice expressed here in this article are solely by investment experts. Zee Business suggests that its readers consult their investment advisers before making a financial decision.)