Market Turns Volatile, Crude Prices And Earnings To Direct Ahead

weekly share market news and updates

Our Analysis

This week the D-street was highly steered with emotions and had no clear direction to ride. These sentiments across the market participant are resultant of the jump in Brent crude prices ($75/per barrel) as well as a rising VIX. VIX almost logged its 3 years high this week and crossed the 24-Mark. During the week, snatching first two days bumpy ride, bulls made a heroic comeback till the noon of Thursday. However, in the last session of the same day bears took over the control on D-street ahead of F&O expiry for April series. However, throughout the week earnings remained the kingmaker for the market trend. Positive earnings like Ultra-tech cement have boosted markets on the contrary disappointing earnings from Maruti dragged them back.

Going ahead the attention will be on the corporate earnings and the macro data such as Infrastructure output and the government budget value for the month of March. Also, the fourth phase of voting will go on 29th April for Lok Sabha which is also one more key event to keep an eye in the upcoming week. Moreover, auto sales figures which are lined up in the initial weeks of the month and crude price movements will also be determinant for the further market direction. Being a significant importer of crude oil, the high oil price impacts Indian macros thereby Indian markets. It is said that a 10 percent spike in crude prices can result in a 0.4 percent widening of the CAD(Current Account Deficit), which consequently play out into a 3-4 percent depreciation in the Indian rupee (INR) which further pushes up the inflation by around 0.24 percent.

The Nifty has been trading in the range of 11550-11,800 since the last 18 trading sessions. Wednesday rally which has shown a strong pullback from its recent supports has not managed to carry further a follow-up price action. Owing to which most of the gains earned were wiped out ahead of F&O expiry. For the Next week, 11,650 will act as a crucial pivot point. If the Nifty continued to trade above this level (11650), then there are chances that nifty can reach its previous high again. However, if Nifty fails to compose on 11650 mark then it may fall up to 11,400. Though there seem some chances of pausing this trend at 11,550.

This Weeks Market Highlights:

Benchmark Indices:

1)On Monday Indian markets had a rough day on the back of a sharp rise in the crude oil price ($75/ per barrel). The market closed on the day's low with Sensex down by 495.10 while Nifty closed at 11,594.50. The damage was seen in the overall sector with reality sector hurt the worst, On the other side, Nifty IT was the only sector to perform on the back of the weakness in rupee.

2)On Tuesday, Indian indices fell for the third trading session in a row, The Banking stocks led the decline The Sensex was down by 80.30 points at 38564.88, while Nifty declined by 18.50 points at 11576.

3) On Wednesday, The last hour buying helped the market to close on a strong note, Ultra tech cement's strong results & halt in the Brent crude price pushed the Sensex to close above 39000 Mark, while Nifty was up 150.20 points at 11726.20 Nifty PSU Bank Index remained the top performing sector with a gain of 1.54%.

4) In the second half of Thursday, markets witnessed a major setback led by a surge in crude prices coupled with poor quarterly numbers from Maruti. While the Nifty was trading around 11800 Mark, hampered investor sentiments dragged it back to 11641.80, The downtrend was highly aided by a sharp decline in BankNifty and Metal indices. Despite all the ups and downs, the reality was the only sector which has managed to close in the green zone.

5) On Friday, It is a firm start for the May F&O series as Nifty opened around 11,700 level.

Broader Index & Global Market:

- Globally, On the Wall Street, The indices scaled to record high amid the positive earnings surprises and favorable economic data, In coming days, Wall Street would be busy on the economic front, as well as the quarterly earnings will see a stock - specific action.

- In the broader market, The Mid & Small Cap was strong as compared to the benchmark indices, overall stock/sector specific action continues.In this week the Cement, reality, sugar sector was in focus.

Movers & Shakers

Shares of UltraTech Cement surged more than 10 percent after the company posted the strong Q4FY19 result, UltraTech Cement has reported 108 percent jump in its standalone net profit at Rs 1,017.5 crore on the back of better operating performance. Its revenue was up 18 percent at Rs 10,500 crore against Rs 8,872 crore, YoY. EBITDA stood at Rs 2,213 crore, while margin at 21 percent.

Shares of Bharti Infratel dropped more than 11 percent in a week after the company posted flat Q4FY2019 result coupled with downgradation from CLSA dragged the stock lower.

Key Market Drivers

  • India's steel demand is likely to grow above 7% in 2019, 2020: World Steel Association
  • Gold imports drop 3% to $32.8 bn in 2018-19.
  • The United States announces that all imports of Iranian oil must end or be subject to sanctions by may.
  • India misses target of becoming an electricity-surplus nation; peak power deficit at 0.8% in FY19.
  • Sebi reduces the minimum subscription requirement for REITs, InvITs.
  • RBI has notified banks & financial institution to disclose their total exposure & provisions to beleaguered ILFS in their notes to account. We believe this move should provide clarity on the exposure and provisions related to the IL&FS group.
  • The RBI had exited from the National Housing Bank (NHB) and the National Bank for Agriculture & Rural Development (Nabard), by selling its entire stakes to the government, making them fully government-owned.

Event Watch

International:

  • US Initial Jobless Claims
  • China Manufacturing PMI
  • US Employment Cost Index
  • Nikkei Japan PMI Mfg
  • Markit US Mfg PMI
  • Caixin China PMI Mfg

Domestic:

  • Nikkei India PMI Mfg
  • Crude Movement
  • Q4FY2019 Earning
  • INR Price

Stocks To Watch

AUROPHARMA,INDIA CEMENT & NAVNEET EDUCATION On Upside while AMARAJABAT, STERLITE TECH on Downside.

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ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

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