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F&O expiry, FII flow, macro data among 8 factors that will steer market next week

The coming week may see more volatility due to the expiry of May series F&O contracts.

, ETMarkets.com|
May 26, 2019, 09.42 AM IST
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The flow of foreign portfolio investments will remain an important factor for the market.
NEW DELHI: Despite strong volatility, domestic equities logged solid gains during the week gone by as a majority verdict for the Narendra Modi-led NDA infused bullish sentiment in the market.

Analysts said investors, who were staying away from the market due to uncertainty in the runup to the general election, are coming to the market now.

For the week gone by, headline indices Sensex and Nifty jumped 4 per cent.

The coming week may see more volatility due to the expiry of May series futures & options contracts. Analysts are advising investors to go for contrarian bets as the market may now start reacting to macroeconomic numbers, corporate earnings and global cues.

“When corporate or election results are as per market expectations, it is pointless to act on information that is already known to all. Everything has been already discounted for and, therefore, taking a contrarian bet could be far more profitable than going with the consensus," said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote.

Let's take a look at that factors that will influence market mood during the coming week:

F&O contracts expire on Thursday
The market may experience bouts of volatility as the May series futures & options contracts expire on Thursday and participants will roll over their positions to the June series.

Buzz around Cabinet formation
The new Cabinet is to take shape in the next few days and even if it is too early to expect any policy announcement, the market will keep a close eye on the development.

Flow of foreign money
The flow of foreign portfolio investments will remain an important factor for the market. Foreign portfolio investors (FPIs) have remained net buyers in the market, putting in Rs 2,026.33 crore on Friday, NSE data showed. So far in May, FPIs pulled out Rs 2,093 crore, data available with NSDL showed.

Fourth quarter GDP print
All eyes will be on India's fourth quarter GDP print, expected on Friday. The country's GDP growth slipped to 6.6 per cent in third quarter of FY19. The economy had grown 7.1 per cent in the second quarter and 8.2 per cent in the first quarter, logging 7.6 per cent for the first half.

Fiscal deficit, infra output data
The fiscal deficit numbers and infrastructure output for April will be released on Friday. Both are significant macroeconomic data that can give an idea on the country's economic health.

March quarter earnings
Fourth quarter earnings season is at its end. NTPC, Adani Ports, GAIL, IndiGo, Zee Entertainment, PNB, Sun Pharma, Coal India and Power Grid Corporation are scheduled to come out with their March quarter numbers during the coming week.

Global macro
Bank of Japan's core CPI, China's manufacturing and non-manufacturing PMI (May), Japan's industrial production data (April) and personal spending and income data of the US for April are among the key global macro numbers scheduled to be released during the coming week.

Technical outlook
Last week, Nifty formed a bullish gap-up candle on the weekly chart, indicating that the bulls are holding a tight grip on the market. However, analysts see downward pressure too. If Nifty trades above 11,859, at least for the first one hour on Monday, it can extend its strength towards 11,955 level, said Mazhar Mohammad of Chartviewindia.in.

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