Q1 results, global cues to steer key indices

Strengthened by encouraging domestic macroeconomic data, better progress of monsoon, decent Q1 earnings and sustained inflows from FIIs; the domestic stock market continued its record run during the week, ended with NSE Nifty nearly kissing the 20,000 mark and BSE Sensex shooting past 67,000 points for the first time. The Sensex ended the week with a gain of 0.94 percent or 623.36 points to finish at 66,684.26pts, and Nifty added 0.92 percent or 180.5 points to end at 19,745pts. During the course of the week, the Sensex and Nifty touched fresh record highs of 67,619.17pts and 19,991.85pts.

Triggered by weakness in IT stocks after Infosys slashed its guidance for the rest of this fiscal and muted performance expectation from RIL and HUL, there was some selling pressure on Friday. The biggest influencing factor in the week ahead would be the quarterly earnings of corporates.

IPO market is supposed to see unstoppable action in the coming week comprising of five public issues apart from three listings. The total fundraising via these public offerings would be Rs857 crore, including Rs170 crore by SME (small and medium enterprise) segment.

Listening Post: Are You Ready for the Next Market Crash?

As of this Friday, the Sensex has gone up nearly 4,000 points without a significant decline, one of the longest such stretch on record. This past week’s nervousness, set off by the Q1 results of couple of major companies is thus the perfect pretext for investors to think about what they will do when the market takes a serious beating.

F&O/ SECTOR WATCH

Ahead of the settlement week, the Nifty index came close to 20,000 level before experiencing a correction. From the option data, it can be observed that the highest open interest for call options in Nifty was at the 19,900 level, followed by 20,000, while for put options, the highest open interest concentration remained at the 19,800 strike. The implied volatility (IV) for call options concluded at 10.88 per cent, while put options closed at 11.35 per cent. The Nifty VIX, a measure of market volatility, ended the week at 11.79 per cent. The Put-Call Ratio Open Interest (PCR OI) settled at 1.37 for the week, indicating positive sentiment of the market participants. Bank Nifty would have the daily range of 45,900-46,700 levels.

Stock futures looking good are Ashok Leyland, Berger Paints, ICICI Bank GAIL, ONGC, MCX and Polycab.Stock futures looking weak ACC, Coforge, Dalmia Bharat, Shree Cement, SRF and UPL.