RBI Policy, Q4 updates, global cues to drive markets in first week of FY25
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With the opening of the new fiscal, investors will eye a host of stock market triggers in the first week of FY25, including the including the Monetary Policy Committee (MPC) meeting by the Reserve Bank of India (RBI), auto sales figures, fourth quarter company updates (Q4FY24) ahead of results, foreign capital inflow, crude oil prices, and global cues.
Domestic equity benchmark Nifty 50 ended FY24 on buoyant note logging their best performance in three fiscal years, gaining 29 per cent in FY24, while Sensex rose 24 per cent. Nifty 50 has advanced 2.74 per cent in the January-March quarter, extending gains for four straight quarters in a row. Both Sensex and Nifty 50 logged a second straight weekly gain of 1.04 per cent.
On March 28, the market rallied on the final calendar day of FY24, extending gains for the second consecutive session, driven by broad-based buying across sectors. At the weekly close, the Sensex surged by 819.41 points (1.13 per cent) to 73,651.35, while the Nifty climbed 230.15 points (1.04 per cent) to 22,326.90.
Also Read: FY24 Review: Tata Motors, Bajaj Auto, among D-Street’s top 10 best-performing largecaps this fiscal; check full list
Despite initially surpassing the 22,500 mark for Nifty and 74,000 for Sensex during the day, both indices failed to maintain these levels by closing. The monthly expiry triggered a notable downturn in the final hour of trading, resulting in Sensex and Nifty dropping around one per cent from their highs.
On FY24’s last trading day, the 30-share index rose 655.04 points or 0.90 per cent to settle at 73,651.35, while the NSE Nifty climbed 203.25 points or 0.92 per cent to settle at 22,326.90. Reviewing FY24, analysts said despite facing 8-10 declines every alternate month, the market remained resilient, buoyed by domestic investors’ confidence in India’s economic strength and growth prospects.
Commenting on the outlook for FY25, Vinod Nair, Head of Research, Geojit Financial Services said, ‘’As we move on to a new financial year, we express optimism towards sectors such as Pharma, Capital Goods, and Infra, as we see them as key growth drivers, supported by both domestic and external demand.”
‘’Although some sectors like FMCG and IT are facing challenges due to subdued demand at present, we anticipate a turnaround, driven by expectations of a normal monsoon and increased US demand following the Fed’s rate cut. However, the focus is on large caps, as the premium valuation of Midcaps could have a hiccup in the short to medium-term.”
Also Read: FY24 Review | Brent rises nearly 9% in last 12 months on OPEC cuts, Middle-East tensions; Will oil hit $100 in FY25?
Moving on to FY25, the primary market will be buzzing as several listings are slated across the small-and-medium enterprises (SME) segment. Some new initial public offerings (IPO) across the mainboard and SME segments will open for subscription. The week will be crucial from domestic and technical point of view as investors will eye economic indicators and the banking policy.
Overall, analysts expect volatility to remain high with the scheduled MPC’s policy meet. The tone is likely to remain positive and the momentum will largely depend on the Nifty 50’s alignment and the banking index. Experts advice traders to focus on largecaps and sectors that show higher strength.
Here are the key triggers for stock markets in the coming week:
RBI MPC Meeting
The central bank’s rate-setting monetary policy panel will begin deliberations for the first policy verdict of the new fiscal 2024-25 this week. Headed by RBI Governor Shaktikanta Das, the six-member MPC will meet for three days – from April 3-5, and the decision will be announced on Friday, April 5 at 10 am by the RBI Governor.
The RBI has kept the repo rate unchanged at 6.5 per cent since February 2023. In the run-up to the MPC decision, market volatility may persist and rate-sensitive stocks will be in focus throughout the week.
D-Street analysts and economists largely expect the central bank to continue its current stance as in order to bring India’s inflation near its target level after the US Federal Reserve dovish stance earlier this month. Fed expects three rate cuts in 2024, but only after US inflation heads towards its two per cent target.
Also Read: RBI releases MPC schedule for FY25, first meeting to be held from April 3-5; check details
Q4 Updates, Auto Sales
Investors will analyze corporate earning estimates/updates announced by several companies in the coming week as the first batch of Q4FY24 results are set to be released from April 11, 2024 onwards -starting with tech majors. ‘’Investors will draw their attention towards India’s Q4FY24 result forecasts, which are expected to indicate a healthy performance,” said Vinod Nair.
On the macroeconomic front, market participants will also closely observe key numbers such as forex reserves, announcements on price reduction in commercial cooking gas rates, jet fuel or petrol and diesel prices, along with auto sales figures. Auto stocks are expected to remain in focus as all major automakers will begin releasing their March sales figures starting from April 1.
Also Read: US inflation rises moderately at 0.3% in February, consumer spending jumps; Fed rate cuts on table
1 new IPO, 7 listings to hit D-Street:
Among the ongoing IPOs, Radiowalla IPO and TAC Infosec IPO will close on April 2, while Yash Optics & Lens IPO, Jay Kailash Namkeen IPO, K2 Infragen IPO will close for bidding on April 3 from the SME segment. Aluwind Architectural IPO and Creative Graphics Solutions India IPO will close on April 4 from the same segment.
Only one new IPO is listed so far which will open for subscription in the first week of FY25. From the mainboard segment, Bharti Hexacom IPO will open for bidding on April 3 and closes on April 5. Among listings, shares of SRM Contractors will get listed on stock exchanges BSE, NSE on April 3.
Additionally, shares of Vishwas Agri Seeds will debut on NSE SME on April 1. Shares of Naman In-Store (India) will get listed on NSE SME on April 2. On April 3, shares of Vruddhi Engineering Works and GConnect Logitech will debut on BSE SME, while shares of Blue Pebble and Aspire & Innovative will get listed on NSE SME.
FII Activity:
Foreign portfolio investors (FPIs) returned as buyers in FY24, pumping ₹2.04 lakh crore in Indian equities, which was the highest FPI inflow since FY21 when the FPI investment stood at ₹2.74 lakh crore, according to stock exchange data. The renewed interest from foreign investors reflects their growing confidence in Indian markets and its potential for growth and returns.
Analysts highlighted that the rise in FPI inflows came on the back of improving macros, declining inflation, hopes of a rate cut in 2024, and the possibility of the incumbent government returning for a third term in the general elections.
FPIs have bought ₹38,098 crore worth of Indian equities and the total inflow stands atRs 51,996 crore as of March 28, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data. The total debt inflows stand at ₹13,602 crore this month.
Foreign institutional investors (FIIs) were net buyers for all sessions in Indian markets last week and the net inflow stands at ₹2,368.76 crore, while domestic institutional investors (DIIs) were also buyers for all sessions, with a total investment of ₹8,913.49 crore, according to stock exchange data.
Also Read: Expert View | Oil market oversupplied with high US output, Brent seen at $87-$92 for 2024: ShareKhan’s Mohammed Imran
Global Cues
On the global front, participants would continue to take cues from US markets, which are showing noticeable resilience, said analysts. Global markets are currently on an upswing, with the Dow Jones up 2.08 per cent and the Nasdaq up 1.17 per cent in the month of March 2024.
US 10-year bond yields and the dollar index are also cooling off, which gives strength to the market. These factors will be closely monitored, as they have the potential to influence market sentiment, said Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.
US Fed Reserve Chairman Jerome Powell’s speech is scheduled for April 3, 2024, and data like US ISM services PMI for March will be declared on April 1, 2024. US job openings will be declared on April 2 and US non-farm payroll data and the unemployment rate for March will be announced on April 5, 2024. These factors will be closely monitored, as they have the potential to influence market sentiment.
Oil Prices, OPEC meeting
Global crude oil prices jumped more than $1 per barrel in the previous session and stayed at the five-month high level, eventually closing the month higher as the Organisation of Petroleum Exporting Countries and its allies (OPEC+) is expected to stay the course on production cuts. The ongoing attacks on Russia’s energy infrastructure and a falling US rig count also resulted in tightening crude supplies
Brent crude futures for May settled at $87.48 per barrel, its highest level since October 27, after gaining $1.39, or 1.6 per cent. The more actively traded June contract settled at $87 per barrel, rising $1.58. US West Texas Intermediate crude futures settled at $83.17 a barrel, rising $1.82, or 2.2 per cent.
On the week, Brent rose 2.4 per cent and WTI gained about 3.2 per cent. Both benchmarks finished higher for a third consecutive month. The Brent crude’s highest mark achieved in FY24 was $97.69 per barrel in September 2023, while the lowest was $71.28 per barrel in May 2023. Brent has risen nearly nine per cent in fiscal 2023-24 (FY24).
Several brokerages and commodity analysts have raised their near-term and full year price outlook for Brent over the consistent geopolitical headwinds. On an average, analysts see Brent crude prices to average $87-$95/bbl in 2024.
Investors will watch for cues from the OPEC’s Joint Monitoring Ministerial Committee meeting on April 3. Increased geopolitical risk has raised expectations of possible supply disruption, but OPEC is widely expected to not announce any output policy changes until a full ministerial gathering in June.
Corporate Action
In the first week of the new fiscal 2024-25, shares of several companies will trade ex-dividend, ex-bonus and ex-split, while some have declared buyback of shares. Shares of TVS Holdings, Varun Beverages, Bharat Dynamics, Ashok Leyland and others will trade ex-dividend, while shares of Bodhi Tree Multimedia will trade ex-split. Check full list here
Technical View
Commenting on the market outlook for FY25’s first week, Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said, “While markets may witness wild fluctuations due to valuations of benchmark indices being in an expensive zone, the undertone still remains bullish as investors are willing to bet big on equity assets for the next financial year too. ‘’
‘’Sectors like banking and IT companies will be in focus going ahead. Although corrections at every interval will provide investors an opportunity to revisit mid & small-cap stocks, large-cap stocks could attract more attention going ahead,” said Tapse. Technically, Nifty’s immediate hurdle is seen only at its all-time-high at 22,527 mark, while the support is placed at 22,000 mark, he added.
Also Read: Dividend Stocks: Ashok Leyland, Varun Beverages, others to trade ex-dividend in first week of FY25; check full list
Ajit Mishra, SVP – Technical Research, Religare Broking Ltd expects tone to remain positive, however momentum would depend on the alignment of Nifty and the banking index, he said. ‘’We are eyeing 22,550-22,700 in Nifty ahead, with cushion at 21,850-22,050 zone. Amid all, we reiterate our preference for index majors and large midcaps and suggest focusing on themes/sectors which are showing relatively higher strength,” said Mishra.
On a weekly basis, Nifty formed a long bullish candlestick pattern with a higher high, higher low formation on the weekly charts, according to Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd. ‘’It remained above the 10-week EMA, which acted as a support on a closing basis,” said Nanda.
‘’In Bank Nifty, the index formed a bullish candlestick pattern with an upper shadow on the daily charts, while during the week, the index gained half a percent and formed a long bullish candlestick pattern on the weekly charts,” added Nanda.
Also Read: Fed need not be in hurry to cut rates, inflation data within expectations: Jerome Powell
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities noted that after a period of bullish resurgence, the Bank Nifty index exhibited strength by surpassing the 20-day moving average hurdle set at 47,000, backed by significant volumes. Despite this, it faced resistance around the 47,500 mark.
‘’A decisive breach above this resistance could propel the index towards the 48,000 level. Conversely, the immediate support is situated at the 47,000-46,800 zone. A conclusive drop below this support level, especially on a closing basis, might indicate a false breakout scenario,” said Shah.
Disclaimer: The views and recommendations above are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 31 Mar 2024, 06:08 AM IST
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