Overall, analysts predict that the first week of the new fiscal year FY25 would be beneficial for the market, with a focus on car sales data, manufacturing and services PMI data, an interest rate decision made by the RBI, and forecasts for the March FY24 quarter earnings.
The market closed the abbreviated week on March 28 with a robust close, with benchmark indexes up 1 percent and participation from most sectors except IT, following weeks of stabilization.
In fact, the monthly expiry session for March derivative contracts saw a strong surge, indicating that the market may be approaching a record high shortly.
Overall, analysts predict that the first week of the new fiscal year FY25 would be beneficial for the market, with a focus on car sales data, manufacturing and services PMI data, an interest rate decision made by the RBI, and forecasts for the March FY24 quarter earnings.
The Nifty 50 rose 230 points to 22,327, while the BSE Sensex vaulted 819 points to 73,651, while the wider markets outperformed benchmarks, with the Nifty Midcap 100 and Smallcap 100 indexes rising 1.6% and 1.4%, respectively.
In the meanwhile, the Nifty 50 surged 28.6 percent, the Nifty Midcap 100 index rose 60 percent, and the Smallcap index rose 70 percent during the fiscal year 2023–2024.
In general, we anticipate that the market will maintain its upward trend while concentrating on large-cap stocks. We think that equities focused on the government will be in focus once the election gets underway in April. The publication of monthly vehicle sales data is expected to put auto stocks in the spotlight next week, according to Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
The majority of brokerages anticipate single-digit rise in passenger car sales and double-digit growth in retail two-wheeler sales in March 2024; however, commercial vehicle and tractor sales may perform less well than expected.
RBI Guidelines
The Monetary Policy Committee’s three-day decision on interest rates will be the next significant event to pay attention to next week. Though the US Federal Reserve’s actions will mostly determine any future interest rate reduction, all economists believe that there won’t be a change in policy rates on April 5 and that the discussion will be keenly monitored.
Inflation measured by the Consumer Price Index (CPI) decreased to 5.09 percent in February from 5.10 percent in January. Core inflation, or inflation not including food and fuel, also decreased, falling to 3.3 percent from 3.6 percent in the same month.
Information about Domestic Economy
Additionally, the market players will be watching the final HSBC Manufacturing PMI data for March, which is scheduled for release on April 2, as well as the Services PMI statistics, which are scheduled for release on April 4. The flash services PMI decreased to 60.3 from 60.6 in February, while the HSBC flash manufacturing PMI increased to 59.2 in March—the highest level since February 2008—from 56.9 in February.
On April 5, bank loan and deposit growth statistics for the two weeks ending March 22 and foreign exchange reserves for the week ending March 29 will be made public.
Fed Chair Powell’s Remark
Participants in the markets around the world will be concentrating on the Federal Reserve Chair Jerome Powell’s address on April 3. Next week, numerous additional Fed officials will also be giving lectures.
Powell reaffirmed last week in his address in San Francisco that the Federal Reserve is not in a rush to lower interest rates. The Federal Reserve wants to see inflation steadily grow closer to its 2 percent objective in the face of positive employment data. Investors began anticipating the first rate decrease in June 2024, but Powell signaled three this year at the March policy meeting.
Worldwide Economic Information
The participants will also be monitoring the final manufacturing and services PMI statistics for March from a number of other countries, such as the US and China. We’ll also be keeping an eye on the US unemployment rate, non-farm payrolls, JOLTs job vacancies & quits, and industrial order statistics.
United States
Euro Area
Japan
China
Oil Costs
The street will also be watching the oil prices, as Brent crude futures surged 2.64 percent in the final week of March 2024 to end at $87.07 a barrel, the highest closing level since October 2023, following a little decrease the week before. Technically, the prices continued to trade above all significant moving averages and the trendline of falling resistance for an additional week. India is a net importer of oil, thus price increases that are steady pose a problem.
Indeed, for the third month in a row, oil prices increased, climbing 6.3 percent in March and 13 percent in the March quarter of 2024. The market’s expectation of reduced interest rates and the output curbs by OPEC+ were blamed for this spike. Furthermore, according to Kotak Securities’ Ravindra Rao, indications that Russia is adhering to its production commitments under OPEC might spur additional price hikes in the crude oil market by reorienting the attention from exports to production.
IPO
Regarding the primary market, Bharti Hexacom’s IPO will mark the start of the new financial year (FY25), but there won’t be any other IPO launches in the SME sector. On April 3, Bharti Hexacom will begin accepting subscriptions for its Rs 4,275-crore public offering, with a price range of Rs 542-570 per share.
Next week marks the closing of the initial public offerings (IPOs) of seven SME companies: Radiowalla Network, TAC Infosec, Yash Optics & Lens, Jay Kailash Namkeen, K2 Infragen, Aluwind Architectural, and Creative Graphics Solutions India.
Additionally, only one mainboard company, SRM Contractors, is scheduled to list on April 3rd of next week. Nine SME companies, including Vishwas Agri Seeds, Naman In-Store (India), Vruddhi Engineering Works, Blue Pebble, Aspire & Innovative Advertising, GConnect Logitech and Supply Chain, Trust Fintech, Radiowalla Network, and TAC Infosec, will be making their debut on the bourses.
Technical Perspective
Technically speaking, analysts were upbeat as the Nifty 50 recovered 22,300 in the most recent trading session with above-average volumes, held above a downward-sloping resistance trendline, and traded above all significant moving averages. All eyes will be on the record high of 22,526 next week. They put the critical support at 22,000 and the immediate support at 22,200.
“In Nifty, the market is very volatile close to the all-time high of over 22,500 levels, according to the daily charts. Nifty is anticipated to rise further higher, while there are signs that it could find support from the lows, according to Arvinder Singh Nanda, Senior Vice President of Master Capital Services.
Weekly charts showed that Nifty has created a bullish candlestick pattern with a higher high, higher low formation. It also continued to be higher than the 10-week EMA, which closed as support. Arvinder stated that the immediate support is around levels 22,200–22,100, and the next upside levels to monitor are around 22,550–22,650 in the next week.
F&O Signals
Additionally, options data suggested that in the next series, the Nifty 50 would see resistance near the 22,600–22,500 levels, with support at the 22,200 and 22,000 levels.
With noteworthy writing at 22,300 strike, then 22,700 & 22,600 strikes, the largest open interest on the call side was apparent at 22,600 strike, followed by 22,300 & 22,500 strikes. With writing at 22,300 strike, then 22,400 strike, the greatest open interest on the put side was held by the 22,300 strike, followed by the 22,000 and 22,400 strikes.
In the meantime, the fear indicator, the India VIX, recovered with a 5% upswing to end the previous week at 12.83, following a 10.74 percent loss the week before, although it was still within comfortable bounds.
Business Conduct
The following important business events are scheduled for the upcoming week:
**Disclaimer: The opinions and advice on investments provided by Moneycontrol.com’s financial specialists are their own.