Stock Market This Week: Q1 Results, Oil Prices, Macro Data, Other Factors to Watch Out For

The benchmark indices settled with marginal gains amid relentless selling by FIIs, falling rupee and inflationary pressures in the previous week. The BSE Sensex surged 179.95 points or 0.34 per cent to 52,907.93 during the week ended Friday and the Nifty surged 52.80 or 0.34 per cent to 15,752.05. On July 1, a hike in the export tax on oil producers pulled down the oil & gas space as well as the market but later in the day other sectors helped narrow the losses.

Also, the rupee rebounded from its all-time low to close 12 paise higher at 78.94 (provisional) against the US dollar on Friday. “The Indian government’s effort of tightening exports of oil and imports of gold fell short to change the market mood as the participants remained worried about capital outflows, risk-off sentiments and widening deficit,” said Dilip Parmar, Research Analyst, HDFC Securities.

Consolidation is expected to continue, with all eyes on corporate earnings and global cues, including the release of the Federal Reserve Open Market Committee (FOMC) meeting’s minutes, experts said.

“Participants will be closely eyeing its results for any change in the guidance amid the fear of a global slowdown. Besides, the performance of the global indices, crude movement and updates on the ongoing tussle between Russia-Ukraine will be in focus,” Ajit Mishra, VP-Research at Religare Broking said.

The coming week would also be a crucial one as this marks the start of a fresh earning season, with information and technology service major, TCS announcing its first quarter results on July 08, 2022. Additionally, investor’s would also await the release of S&P Global Services PMI on July 05, S&P Global India Services PMI increased to 58.9 in May 2022, the highest since April 2011, from 57.9 in April.

Q1 Company Results

The June quarter corporate earnings season will be kicked off by Tata Consultancy Services, the country’s largest software services exporter on July 8 followed by Avenue Supermarts, the operator of the supermarket chain of D-Mart stores, the next day. Hence, there could be some stock-specific action in the market.

The IT sector is expected to see margin pressure, with an increase in attrition, while infrastructure and some cyclical segments may see early signs of a slowdown. Auto and FMCG names could see good numbers for the quarter ended June 2022, experts said.

Global Cues

On the global front, investors would be eyeing few economic data from world’s largest economy, United States (US), starting with Factory Orders MoM on July 5, followed by MBA Purchase Index, Redbook, S&P Global Services PMI Final, FOMC Minutes on July 6, Balance of Trade, Initial Jobless Claims on July 07 and finally Baker Hughes Total Rig Count on July 08.

Fed Meet Minutes

The Federal Reserve will release minutes of its June monetary policy meeting, which will be closely watched by investors globally for economic progress and rate-hike trajectory.

In the June meeting, FOMC raised interest rates by 75 bps, the biggest increase in three decades. Chairman Jerome Powell has hinted at another 50-75 bps increase in rates in the July meeting to control inflation back to its 2 percent target, without impacting economic growth.

Oil prices

Oil prices remained volatile, with international benchmark Brent crude futures rising up to $120 a barrel and declining up to $108 a barrel in the passing week before closing 1.4 percent down compared to the previous week. At above $100 a barrel, oil remains a risk for importing countries like India and is expected to cap the market upside till it falls way below that threshold, experts said.

The tight supply due to geopolitical tensions continues to support prices, though recession worries weighed on the sentiment and pulled down prices a bit on weekly basis.