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Crude, rupee, earnings among 8 factors steering stock market in the week ahead

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NEW DELHI: Election-related jitters, crude oil prices, heightened VIX, rupee movement and April FO expiry swayed sentiment in the domestic market last week.

Benchmarks Sensex and Nifty swung between gains and losses through the week. Eventually, on a weekly basis, Sensex slipped 73 points, or 0.2 per cent, while Nifty added 2 points.

Going into a week, crude oil, rupee, March quarter earnings and macroeconomic data will be among the important factors steering the market.

It is going to be a truncated week as the market will remain closed on Monday for voting in the general election and on Wednesday on account of Maharashtra Day. Let's take a look at the factors that are likely to influence market movement in the coming week.Key March quarter earningsThe earnings season is at its peak and hundreds of companies will release their numbers during the coming week.

Ambuja Cements, Can Fin Homes and Kotak Mahindra Bank will release their March quarter numbers on Tuesday, while Britannia Industries will come out with its numbers on Wednesday.

Bandhan Bank, Dabur India, MRF and Tata Power will release their earnings numbers on Thursday, and Hindustan Unilever will announce its results on Friday.

The numbers of these sectoral majors are expected to have a significant impact on market sentiment. Investors to watch data printsIndia's infrastructure output and fiscal deficit numbers for March will be out next week and the market is going to keenly observe those numbers.

Both data are expected to be released on Tuesday.

Nikkei Markit Manufacturing PMI for April is another important number, scheduled to be released on Thursday. US Fed’s rate reviewThe interest rate decision of the US Fed will be out on Wednesday night (India time).

While a rate pause looks almost certain, investors are speculating about the tone of the Fed when Wall Street is near record highs, recession worries are ebbing and the health of the US economy looks brighter after it grew at 3.2 per cent in the first quarter.

As per a Reuters poll, it is unlikely that the Fed will hike rates as inflation is below the Fed’s threshold and unemployment is the lowest in generations. Global macro data to watch The market is also expected to react to global sentiment as a number of important macroeconomic prints, including China NBS Manufacturing PMI data and Caixin Manufacturing PMI data for April, US ISM Manufacturing PMI data and nonfarm payrolls data for April and eurozone's GDP and inflation numbers will be released during the week.

Election politicsAnalysts are of the view that the market will keep experiencing occasional jitters until the results of the general election are out on May 23.

"One needs to remember we are entering the final few phases of voting and this is the month India will have its new government.

So volatility is in the wind, and that will be blowing throughout the month," said Mustafa Nadeem, CEO, Epic Research. Crude oil price During the week gone by, the market reacted sharply to the fluctuation in crude oil prices and it will remain an important immediate trigger for market movement even during the coming week.

Crude oil prices fell 3 per cent on Friday after the US President asked Opec to raise crude production to ease gasoline prices.

The market may see some gains if oil prices remain in the lower orbit. Rupee movementThe rupee rebounded by 23 paise to close at 70.02 against the US dollar on Friday, supported by a drop in crude oil prices and the greenback's weakness against key rivals overseas.

The health of the domestic currency will have a strong impact on the mood of the equity market. Technical readingsNifty50 breached a previous swing high of 11,761 on Friday and closed a tad below that level.

Nagaraj Shetti of HDFC Securities said Nifty trends remain positive and chances are that it may move towards the 10,850-870 range by next week.

The 11,800 level could act as a strong resistance, a break of which may push the index to a record high.




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