Earnings, global cues to set market trend this week: Analysts Quarterly earnings and global developments would be the major factors driving equity markets in the holiday-shortened week ahead, analysts said. Foreign fund movement will also play a crucial role in deciding the trend, they added. “This week market will deal with the last batch of Q1 earnings where it will react to SBI, HPCL and BPCL results on Monday, while Adani Ports, Bharti Airtel, PowerGrid, Coal India, Eicher Motors, Hindalco, Grasim, Hero Motocorp, LIC, ONGC and Bata India will be other prominent earnings during the week,” said Santosh Meena, Head of Research, Swastika Investmart Ltd. The country’s biggest lender State Bank of India (SBI) on Saturday posted a 7 per cent decline in standalone net profit at Rs 6,068 crore for the first quarter of the current financial year on account of mark-to-market (MTM) losses. Hindustan Petroleum Corporation Ltd (HPCL) on Saturday reported its highest-ever quarterly net loss of Rs 10,196.94 crore in the June quarter as a freeze on petrol and diesel price revision wiped away record refining margins. Also read: India’s passive investing AUM up 14% in 2022, investors hunting diversified products | S&P Dow Jones INTERVIEW Global cues will be important as geopolitical concerns are rising whereas both domestic and global macro numbers will play an important role, Meena added. India will announce its CPI and IIP data on August 12, while US inflation numbers will be released on August 10. “This week is a holiday-shortened one and participants will be closely eyeing global markets and domestic factors viz. earnings and macroeconomic data for cues. “Further escalation of China-Taiwan tension may result in volatile swings. On the data front, we have IIP and CPI inflation scheduled for August 12,” said Ajit Mishra, VP – Research, Religare Broking Ltd. The 30-share BSE benchmark Sensex advanced 817.68 points or 1.42 per cent last week. It was the third straight week of gains for the Indian equity markets, thanks to continuous buying by FIIs. However, volatility has jumped at higher levels as the market is a little overbought, Meena of Swastika Investmart added. Also read: Nifty holds 17350 after RBI MPC hikes repo rate, charts show indecisiveness; rally possible on 17500 breakout Apurva Sheth, Head of Market Perspectives, Samco Securities, said, “On a macroeconomic front, this week is expected to be jam-packed for investors. The global markets are likely to dance to the tune of the inflation figures to be released by the United States and China. Back home, market players will turn to the Indian CPI print for hints about the economy’s trajectory.” With the overhang of monetary policy now behind us, the geopolitical tension between China and Taiwan will be in focus, as any flare up in the region may lead to panic situations across the globe, said Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities Ltd.
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.
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FII and DII trades: Foreign Institutional Investors (FII) have been net buyers of domestic stocks for successive days now. On Wednesday, FIIs pumped in Rs 2,347 crore. Domestic Institutional Investors (DII) have been net sellers, pulling out Rs 510 crore yesterday.
IPO watch: Syrma SGS Technology enters the final day of bidding today. So far the issue, that opened last week, has been subscribed 2.27 times. Retail investors have subscribed their portion 2.66 times while NIIs have bid for their quota 3.58 times and QIB portion has been bid for 0.71 times.