Market Outlook: Fed rate hike and number of big boys in Q1 to seal fate of Nifty bulls this week

After posting the biggest weekly gain in the past 75 weeks, the Nifty bulls will be looking to maintain momentum on Monday after six days of uninterrupted rise. As the market opens, attention would turn to index heavyweights like , and , which announced their numbers after the market closed on Friday. Infosys was due to release its June quarterly report later today.

In addition to FII flows, US FOMC results, developments in rupee-dollar trade, the trajectory of crude oil prices and the expected expiration of July derivatives contracts will keep attendees busy this week. Here are the main triggers to follow:

1st quarter results
Along with the heavyweights that announced results after the market closed on Friday and over the weekend, a long list of top companies will announce results this week.

Monday itself will have Axis Bank,

and come out with their Q1 numbers. In the following days, , , , L&T, , , , Nestle, , Dr Reddy’s and are among the main companies that will publish their quarterly newsletters.

Result of the Fed meeting
The US Fed would meet on July 26-27, during which Jerome Powell is expected to slow the pace of interest rate hikes. Market participants will attempt to interpret between the lines to gauge the economy’s course, said Apurva Sheth of Samco Securities. “The Fed would try to contain inflation without harming the labor market. On top of that, the release of the US QoQ GDP numbers would impact market sentiment,” Seth said.

Rupee
The Indian rupee ended its 11-week losing streak on Friday, benefiting from the intervention of the RBI after breaking through the 80 per dollar mark. It ended at 79.85. “All eyes are on the Fed statement for further clues and guidance. The range of rupees so far can be seen between 79.75 and 80.20,” said Jateen Trivedi of

.

F&O expiry
Ruchit Jain, Lead Research, 5paisa.com, said FIIs were covering some of their short positions in index futures, which led to positive momentum. “Given that momentum readings have approached the overbought zone, it is prudent to look to take profits now on long positions and get money off the table. On the other hand, support immediate for Nifty is placed around 16,590, followed by the recent gap zone of 16,490-16,360,” he said.

IFI flow
FIIs were net buyers last week except Friday. Market experts now say that the relentless sell-off in REITs, which began in October last year, now appears to be over.

“It looks like the depreciation of the INR is almost over for now. contributed to the shift in REIT strategy,” said Dr. VK Vijayakumar, Chief Investment Strategist at

said.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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