ITC Earnings, G7 Meet, India Decides: The Week Ahead

With India halfway through its Lok Sabha election, the nation will head to polls for its fifth and sixth phases during the week. Meanwhile, the momentum going ahead for the markets could potentially be led by the G-7 finance ministers meeting during the week and the earnings of the remaining Nifty company.

Markets on Monday will remain closed on the back of the Election Day in Maharashtra.

The equity markets continued to remain volatile throughout the week, mainly influenced by factors arising from the US and Europe, according to Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services 

"The current trend of swings on the index levels is likely to continue in the coming weeks too, though there is quite a bit of consternation from the high valuations obtaining at this time.”

In a sigh of relief due to the consistent selling of Indian equities by foreign investors, the benchmark indices gained the most last week since the week-ended Feb. 2. On a weekly basis, the Nifty gained 1.86% and the Sensex rose 1.72%.

On the special trading session conducted on Saturday, India's equity markets extended its winning streak. Nifty and Sensex closed 0.16% and 0.12%, respectively on Saturday.

Meanwhile, foreign portfolio investors pulled out over Rs 10,500 crore in the last five trading sessions. But, domestic investors remained bullish despite heightened volatility and mopped up Rs 14,500 crore last week, according to the provisional data from the National Stock Exchange.

Volatility gauge, India VIX, decline 3.9% during the week.

Nifty May futures were up by 0.23% to 22,497.7 at a premium of 31.6 points, with its open interest down by 2.3%. Nifty Bank May futures were up by 0.29% to 48,195.1 at a premium of 79.45 points., while its open interest was up by 0.45%.

Open interest distribution for the Nifty May 23 series indicates that the 21,500 level is seeing the most put strikes, and call strikes of 23,000 have the maximum open interest.

For the Bank Nifty options' May 22 expiry, the maximum call open interest was at 50,000 and the maximum put open interest was at 48,000.

The 22,200 & 22,300 Strike saw call writers (Bears) exiting and put writing, which kept the Index steady throughout Friday's session, according to Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities. "For Nifty to make a sharp upside move, call writers (Bears) need to exit from the 22,500 Strike."

For Bank Nifty, the call writers still have sizeable positions at the 48,000 Strike and the option activity at this strike will provide cues about Bank Nifty’s future direction, Ramani said.

The week will begin with parts of the nation heading to vote on the fifth phase for 49 parliamentary constituencies. Monday will also see voting for 35 assembly constituencies in Phase 2 of Odisha state election. During the first four phases of the election, a voter turnout of 66.95% was recorded giving relief to the uncertainty a lower turnout might cause.

On May 25, voting for 57 parliamentary constituencies in Phase 6 of the General Election will begin while the polling for 42 assembly constituencies in Phase 3 of the Odisha state election will also take place.

On the economic front, S&P Global will release the purchasing managers index, or PMI data on May 23.

The much anticipated quarterly earnings of Nvidia Corp. will come to light this week, that could potentially make-or-break the Wall Street. The FOMC minutes from April 30 - May 1 policy meeting will also be released which could shed light on the expectation of rate cuts in the US.

Japan will release it trade, and inflation print, while Germany will report its GDP figures. Further, the G-7 finance chiefs and central bankers will gather in Stresa, northern Italy, to discuss the global economy.

After a busy two weeks, the primary market will see a slowdown in activity, with Awfis Space Solutions being the only company to launch its public offering in the mainboard segment.

Awfis will offer fresh shares worth Rs 128 crore, which will be a mix of a fresh issue and an offer for sale. At the upper end of the price band, the total IPO size stands at Rs 598.93 crore.

Integrated working space provider Awfis Space Solutions Ltd. has fixed the price band for its upcoming initial public offering at Rs 364–383 per share.

In the SME space, GSM Foils Ltd.'s public offer will be open for subscriptions starting May 24. The price band for the Rs 11.01 crore issue is set at Rs 32 per share, with a lot size of 4,000 shares.

Meanwhile, eight companies will debut on the stock exchanges, with Go Digit General Insurance being the only debutant in the mainboard space.

Rulka Electricals Ltd., HOAC Foods India Ltd., Quest Laboratories Ltd., Indian Emulsifier Ltd., Mandeep Auto Industries Ltd., Veritaas Advertising Ltd., and ABS Marine Services Ltd. will see their listing on the NSE SME segment.

Oil and Natural Gas Corporation Ltd, Grasim Industries Ltd., Sun Pharmaceutical Industries Ltd, ITC Ltd., and divi's Laboratories Ltd. will be the Nifty 50 companies reporting their earnings during that week.

With these done, Apollo Hospital Ltd. will be the only Nifty 50 company left to declare its results for the quarter ended March.

In corporate actions for the week, Vedanta Ltd, Colgate-Palmolive (India) Ltd., Tata Consumer Products Ltd., and State Bank of India are among the major companies with record dates for their interim/final dividend in the coming week.

Meanwhile, Inox Wind Ltd., and Newtime Infrastructure Ltd. will issue bonus share during the week.

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