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Q2 results, macro data to steer equity market value buying expected

Quarterly results, along with manufacturing PMI and fiscal deficit data, are likely to drive the Indian equity market in the coming week.

Market participants and analysts expect value buying in the indices as the market has been largely bearish in the last couple of weeks.

In terms of quarterly results, companies like Bank of Baroda, Tata Power, Tata Motors, Union Bank of India, Lupin, DLF, HDFC, Axis Bank, Punjab National Bank, SAIL and Vedanta are likely to announce their second quarter earnings in the coming week.

Further, the Nikkei Manufacturing Purchasing Managers’ Index (PMI) for October will be released on Thursday, November 1, and the fiscal deficit data for September is due on Wednesday, October 31. This macroeconomic data would be key for the market sentiments.

“Manufacturing PMI and infrastructure output numbers will be seen crucially while leads will also be taken from ICICI Bank’s result (released on Friday). Mostly the trend will be in tandem with the global markets and indices such as S&P 500,” said Mustafa Nadeem, CEO, Epic Research.

On the technical front, the Nifty50 is seen receiving support at 9,951 points and 10,139 would be the immediate resistance level, analysts said.

In the week gone by, the National Stock Exchange (NSE) Nifty50 lost 273.55 points, or 2.65 per cent, on a weekly basis to settle at 10,030 points on Friday.

Similarly, the S&P Bombay Stock Exchange (BSE) Sensex lost 966.32 points, or 2.81 per cent during the week, to close at 33,349.31 points.

On Friday, both the Sensex and the Nifty dropped to seven-month lows.

“During the ongoing Q2 corporate earnings, companies declared lower-than-expected numbers which led to disappointment on the street. FII selling, lower-than-expected earnings and global markets sell-off combined, led to major selling in the markets,” said Rahul Sharma, Senior Research Analyst at Equity99.

In the coming week, the direction of flow of foreign funds will assume significance as there have been massive outflows in October, as investors pulled out from emerging markets to redeploy their capital in safe-havens such as US securities.

According to data provided by the National Securities Depository (NSDL), the monthly outflow of foreign funds at Rs 24,186 crore from the equity segment was at its highest so far in October.

The NSDL website has data from 2002, as Indian markets received minuscule funds from foreign investors prior to that, said Deepak Jasani, Head of HDFC Securities.

During the week just-ended, provisional figures from the stock exchanges showed that foreign institutional investors sold shares worth Rs 5,751.17 crore, whereas domestic institutional investors bought Rs 4,508.62 crore worth of stocks.

Figures from the NSDL showed that foreign portfolio investors divested Rs 4,563.31 crore, or $622.5 million, in the equities segment during the week ended October 26.

Besides, the rupee’s movement against the US dollar and global crude oil prices will also be closely followed by investors.

The Indian rupee on Friday closed at Rs 73.46 to a US dollar, weakening by 14 paise from its previous week’s close of 73.32.

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