Week Ahead: Q2 Results, PMI data, auto sales, US Fed Policy, global cues among

Stepping into the new month, investors will eye a host of stock market triggers in November’s first week including the ongoing second quarter results of current fiscal (Q2FY24), domestic and global macroeconomic data, foreign capital inflow, and key decisions from global central banks.

Domestic equity benchmarks Nifty 50 and Sensex plunged sharply lower in the past week and lost more than 2.5 per cent, the steepest such drop since the week ended September 22, mostly weighed by week global cues. The blue-chips bounced back by 1 per cent, in the final session on Friday, October 27, snapping a six-day losing streak, supported by some healthy corporate results and value-buying in auto, IT, financial and energy stocks.

On Friday, Nifty 50 closed 190 points, or 1.01 per cent, higher at 19,047.25 while the Sensex closed at 63,782.80, up 635 points, or 1.01 per cent. Mid and smallcaps outperformed the benchmarks. The BSE Midcap index rose 1.70 per cent while the smallcap index ended with a gain of 1.89 per cent on October 27.

Also Read: These 10 smallcaps log double-digit rise even as Sensex posts worst weekly decline in a month; do you own?

Sensex and Nifty have slipped 3.18 per cent and 3.17 per cent in the last seven days, posted their worst weekly decline in one month. During the week, all sectoral indices ended in red with media and metal declining the most.

In the broader markets, the domestically focused small- and midcaps have lost 5.1 per cent and 6.4 per cent, respectively in the past six sessions. However, they are still up 30 per cent and 23 per cent, respectively, so far this year, well above the Nifty’s 5.2 per cent increase.

In six trading sessions till October 26, Sensex had declined 3,279.94 points. The domestic market has been under pressure in October because of foreign capital outflow, unimpressive July-September quarter results, record-high US bond yields and Middle East tensions. Nifty 50 is down about 3 per cent this month so far.

Market experts highlighted that the frontline indices ended a three-month long consolidation phase, with the tone being bearish for most of the week but some losses were trimmed in the final session. The ongoing unrest in West Asia and concerns over the potential impacts of higher interest rates on future economic growth have resulted in a decline in investor confidence, according to experts.

‘’The ongoing market consolidation, sectors such as FMCG, consumption, fertilizers, and core segments like infrastructure, housing, are expected to present potential growth opportunities,” said Vinod Nair, Head of Research at Geojit Financial Services.

‘’Contributing factors include the mitigation of risks associated with raw material costs and a stable long-term demand outlook from external sectors, which may specifically support sectors like Chemical and Pharma in the medium-term. In the short-term, market sentiment remains cautious,” added Nair.

Going forward, a busy week awaits the primary market as seven new initial public offerings (IPOs) are slated across mainboard and small-and-medium enterprises (SME) segments. The week will be crucial from the domestic and technical point of view as investors will closely eye the ongoing Q2FY24 results along with key domestic and global events.

Overall, analysts expect the market to continue with its volatile move this week and suspect that the benchmarks are not out of the woods yet. D-Street estimates that some resolution is needed between the ongoing Israel-Hamas war for the markets to remain buoyant.

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

Q2 Results, Auto Sales:

Investors…