Equities on tenterhooks: Covid concerns, Fed decision to induce caution

In addition, Vinod Nair, Head of Research at Geojit Financial Services said the upcoming week will be driven by global sentiments.

Mumbai: India’s key equity indices are expected to maintain caution on the back of rising Covid cases globally as well as the rate decision of the US Fed during the upcoming week.

However, expectations of robust quarterly results along with hopes for an accelerated economic recovery will retain investors’ interest in the market.

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“US Fed interest rate and progress in spread of Coronavirus and its variants will be watched keenly,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

“Nifty has formed lower top lower bottom on weekly charts compared to the previous week. Hence 15,962 resistance becomes an important determinant of the future direction.”

Besides, Jasani cited that as long as this level (15,962) is not breached, markets, sectors and stocks could undergo rotational profit taking.

Furthermore, the week ahead will witness the release of Q1FY22 corporate results from ICICI Bank, ITC, Indusind Bank, Axis Bank, L&T, Tata Motors, Kotak Bank, Dr Reddys, Maruti Suzuki.

“The Q1 result season has so far been in-line of better than expectations – leading to sector or stocks specific action – which is likely to continue in the near term as well,” said Siddhartha Khemka, Head – Retail Research, Broking & Distribution, Motilal Oswal Financial Services.

“Also it may provide investors with some insights into the scale of economic recovery through the management commentaries.”

Last week, India’s equity indices ended with marginal losses after suffering high volatility as surging Delta variant cases impacted risk appetite globally.

According to Joseph Thomas, Head of Research, Emkay Wealth Management: “Over the coming week, the focus would continue to be on the corporate earnings, as the market participants try to gauge the sustainability of the earnings upgrades seen during the last couple of earning seasons.”

“Another factor to watch is the rise in the delta variant cases in the US as also in certain parts of Europe.”

In addition, Vinod Nair, Head of Research at Geojit Financial Services said the upcoming week will be driven by global sentiments.

“As per reports, the Fed is set to deliberate their easy-money policy and start scaling back asset purchases next year with an emphasis on mortgage-backed securities.”