US debt ceiling talks for Q4 earnings: Key triggers to watch for this week

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Last week, the stock market saw a decline for three consecutive days. After Friday’s gain, the Nifty closed at 18,203.40, down 0.61 per cent. BSE Sensex closed at 61,729.68 points. Quarterly results of major companies like BPCL, Ashok Leyland, Hindalco, ONGC, Grasim and Zeel will influence the market sentiment this week.

In contrast to the bearish market trend, banking stocks witnessed resilience. He was also accompanied by a sound performance by IT majors. Apart from banking and IT, broad indices and midcap indices also posted gains this week.

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Market experts believe that the ups and downs in the market will continue this week as well. Mainly due to scheduled expiry of May derivative contracts, global market performance and FII inflows into the economy.

“A marginal rebound on Friday negated some of the losses and the Nifty finally settled at 18,203.40; down 0.61%. Amidst all this, resilience in banking played out combined with a rebound in IT majors eased some of the pressure. Interestingly, broad indices continued their outperformance, while midcap indices edged marginally higher and smallcaps gained around one per cent,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.

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Citing unpredictable market movements, he said the trend would continue in the coming weeks as well due to the scheduled expiry of May derivative contracts. “Meanwhile, the performance of global markets and stability in foreign inflows will remain on participants’ radar for cues,” he added.

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“Nifty respected important support at 18,050 on Friday and its stability will be crucial for the index to reclaim 18,500-18,700 zone. In case of a breakdown, the 17,850 zone will provide the necessary cushion. Meanwhile, traders should focus their attention on identifying stocks from favorite sectors such as banking, financials, FMCG and auto as they are showing resilience amid consolidation. They may also consider select midcap and smallcap counters citing their current out-performance.”

FPI flows

Driven by strong macroeconomic fundamentals, possibility of reduction in interest rates, positive earnings outlook, and falling stock valuations, there has been a steady inflow of equity into India by foreign investors.

by May, approx. 30,945 crore has been invested by foreign investors in Indian equity. The constant inflow data showed the net inflow 16,365 crores in 2023 so far.

Chief Investment Strategist at Geojit Financial Services They believe that FPI investments in India will continue to rise due to optimism around corporate earnings and strong prospects of the Indian economy.

According to depository data, FPIs invested net 30,945 crore in Indian equities during May 2 – May 19.

quarterly results this week

The final leg of the quarterly earnings session has a lot in store for market investors. Earnings of companies like BPCL, Ashok Leyland, NMDCHindalco, oil indiaLIC, vodafone idea, BHEL, ONGC, Sun Pharmaceuticals etc will declare their result this week. The company’s results announced on Saturday will affect his company’s stock performance on Monday.

Elaborating on market investors’ reaction to the earnings scheduled for next week, he said, “On the earnings front some of the leading names like BPCL, Ashokale, Hindalco, ONGC, Grasim and Zeel will announce their numbers during the week.”

us debt ceiling talks

The ongoing talks to raise the debt ceiling in the United States will also influence the market momentum in the coming week. Recently, President Joe Biden and top US congressional Republican Kevin McCarthy expressed the need to reach an agreement soon. It is critical to come to an agreement and pass it in both chambers of Congress before June 1.

fed minute

The Federal Open Market Committee is scheduled to release its meeting minutes next week on May 24. On May 4, the US Fed raised interest rates by 25 basis points to combat the banking crisis and inflation.