Week Ahead: Q4 Results, macro data, Israel-Iran conflict, global cues among key

It will be a busy week for investors in the third week of April amid geopolitical headwinds and the onset of the general election fever back home. Several stock market triggers including the January-March quarter results for fiscal 2023-24 (Q4FY24), general elections 2024, the Israel-Iran conflict, domestic and global economic macroeconomic data, crude oil prices, and global cues are likely to keep investors on their toes and will guide market direction this week.

Despite touching fresh lifetime high levels, domestic equity benchmarks settled flat last week as investors’ hope for a June rate cut were dashed by higher-than-expected inflation in the US, compounded by positive US employment and manufacturing data. Escalating geopolitical tensions in the Middle East, alongside supply concerns, have propelled crude oil prices upward, impacting the overall market sentiment.

Also Read: Oil traders stay bullish as Brent hovers at $90: ‘Crude to stay elevated even if Middle-East tensions cool down’

Gold prices also experienced an uptick due to geopolitical uncertainties, increased central bank purchases, and heightened safe-haven demand. Consequently, emerging markets witnessed a late-week consolidation. Conversely, European markets demonstrated strong performance, buoyed by indications from the ECB suggesting a potential rate cut in the near term.

On the domestic front, foreign investors are exercising caution given the subdued expectations for Q4 results and the premium valuations of mid- and small-cap stocks. Within the IT sector, consolidation persists due to lacklustre Q4 earnings amid slowdowns in spending and uncertainties surrounding US policy rates.

Vinod Nair, Head of Research at Geojit Financial Services said, ‘’Profit-taking is evident in banking stocks, particularly in PSU banks, as the banking sector’s loan growth is moderating, and valuation has surpassed long-term averages.”

Also Read: FPIs pump 13,347 crore in Indian equities, debt flows reduce in April so far: Will inflows continue in FY25?

‘’Conversely, the auto and realty sectors are showing resilience, driven by expectations of strong earnings momentum. Large-cap stocks are viewed as a safer bet amidst heightened volatility given stable earnings outlook and valuation,” added Nair.

Moving ahead, a few initial public offerings (IPO) and listings are slated across the mainboard and small-and-medium enterprises (SME) segment in the primary market this week. The week will be critical from domestic and technical point of view as investors will eye economic indicators and the latest corporate results.

Overall, analysts expect Nifty 50 is likely to go for a further dip but support lies around the 22,350-mark. They added that bulls will heave a sigh of relief only above the 22,800-mark. Experts advise traders to focus more on stock selection and prefer a hedged approach.

Here are the key triggers for stock markets in the coming week:

Domestic Macroeconomic Data, Q4 Results:

On the macroeconomic front, India’s wholesale price index (WPI) -based inflation, trade deficit data, among other indicators will be eyed by investors. Analysts expect markets to remain volatile in the near term given the global concerns and the start of a the first phase of elections this week.

The ongoing Q4FY24 earnings season will be a major factor in driving the market movement. Some major companies will announce their quarterly numbers such as Wipro, Infosys, Bajaj Auto, Mastek, HDFC Asset Management Company, Jio Financial Services, CRISIL, Angel One, among others. Analysts said that the beginning of the earnings season could result in erratic swings across sectors.

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