Investors Brace for a Volatile Week Ahead: Key Triggers to Watch Out For
As the third week of April kicks off, investors are gearing up for a rollercoaster ride in the stock markets. With a plethora of factors at play, ranging from geopolitical tensions to domestic economic indicators, the week ahead is poised to be a crucial one for market participants.
Last week saw domestic equity benchmarks hovering at record highs, only to settle flat as hopes for a June rate cut were dashed by higher-than-expected inflation in the US. The ongoing conflict between Israel and Iran, coupled with surging crude oil prices, added to the market’s uncertainty.
Gold prices witnessed an uptick amidst geopolitical uncertainties, while European markets showed resilience on the back of potential rate cut indications from the ECB. However, caution looms large among foreign investors, particularly in the IT sector, due to lacklustre Q4 earnings and premium valuations in mid- and small-cap stocks.
Vinod Nair, Head of Research at Geojit Financial Services, highlighted the profit-taking trend in banking stocks, driven by moderating loan growth and stretched valuations. On the other hand, sectors like auto and realty are displaying strength, buoyed by expectations of robust earnings momentum.
Looking ahead, the week is packed with market-moving events, including the release of Q4FY24 results and key domestic macroeconomic data. Companies like Wipro, Infosys, and Bajaj Auto are set to announce their quarterly numbers, setting the tone for sectoral performance.
Moreover, the primary market will see the launch of three new IPOs and two listings, adding to the market buzz. Foreign investors’ activity will also be closely monitored, as concerns linger over the sustainability of inflows in the wake of the India-Mauritius tax treaty.
Global cues, particularly the escalating tensions between Iran and Israel, will be a focal point for investors. Any significant escalation in the conflict could trigger panic selling and volatility in global equity markets. Movements in crude oil prices, US bond yields, and economic data will also influence market sentiment.
On the technical front, analysts expect Nifty 50 to face further downside pressure, with support levels around 22,350. Traders are advised to focus on stock selection and adopt a hedged approach amidst the prevailing volatility.
In conclusion, the week ahead promises to be action-packed for investors, with a myriad of factors shaping market direction. From earnings releases to geopolitical developments, market participants will need to stay vigilant and nimble to navigate the choppy waters of the stock market.
