The NBFC crisis, gains among 8 factors that will move the market next week

NEW DELHI: The past week has led to increased market pessimism, as benchmark indexes have been sharply reduced due to concerns over financial health and liquidity crisis in the NBFC sector, rising oil price and a rapid decline in the rupee.

The Sensex of BSE lost 417.95 points, or 1.20%, to settle at 34,315 on Friday, while the Nifty50 recorded 168.95 points, or 1.61%, for end at 10,303. Friday 's sale has cleared 1.60 million rupees of investor wealth in shares.

Even some solid figures from leading companies such as Reliance Industries and Infosys have failed to improve the atmosphere. A sustained outflow of capital created a gloomy atmosphere and dealt a fatal blow to risk appetite. Each market rise encounters a wave of profit reservations. In October, foreign investors withdrew about 20,000 crores of rupees in domestic markets.

At the dawn of a new week, things do not look better. Based on analyst observations, here is a list of factors that will influence market movements next week.

Liquidity and problems NBFC
A perceived liquidity crisis in non-bank financial corporations (NBFCs) has made investors wary, despite the many measures taken by the government and RBI to address this problem. After the IT & FS crisis, the slightest indication of a problem in an NBFC led to a massive selloff. "RBI is trying to inject cash, but it needs to restore confidence in the system for it to continue operating," said Sudip Bandyopadhyay, group president, Inditrade Capital, in an interview with ET Now. "If we let the liquidity crisis continue unabated, it could lead to solvency problems, which would be disastrous. We will have to see how that will be resolved in the next 10 to 15 days, "he said. The effectiveness of RBI's decision to relax liquidity standards and allow more bank loans to NBFCs will be evaluated in the coming days.

F & O bearing
The futures and options of the October series will expire on Thursday and the rolling positions will dominate the proceedings during the week. "Friday's data indicated an open maximum interest of 10,000, followed by 10,200, and a maximum call interest of 11,000, followed by 10,600," said Chandan Taparia of Motilal Oswal Securities. "There was a significant call handwriting at 10,400 followed by 10,600, while the put writing was seen at 10,200 followed by 10,100. The option band meant a bargaining band between 10,200 and 10,500 levels. Friday, the Nifty futures closed in the negative at 10 314 with a loss of 1.24%, "he said. F & O transfers can increase market volatility.

The rupee remains a big concern
The rupee has risen its price to 73.32 against Friday, following a sale of the US currency by exporters and the influx of foreign funds. The domestic unit has fallen behind recently due to volatile crude oil prices, a strong dollar, capital outflows and rising US bond yields. The rupee will remain a key factor to watch in the coming days.

The price of crude oil
Crude oil prices rose Friday in international markets. Futures contracts on Brent rose 49 cents to $ 79.78 a barrel, while demand in China increased significantly. The market is now focusing on US sanctions against Iran, which will come into effect Nov. 4. Crude oil has a direct impact on the health of the rupee and ultimately influences the mood of the market, as rising crude oil prices are worrying soaring prices. current account deficit and fiscal deficit, distorting the country's macroeconomic mathematics. According to RBI estimates, an oil price increase of $ 10 per barrel reduces the country's GDP growth by about 0.15%.

Key results for the second quarter ahead
The earnings season is in full swing now. ITC, Asian Paintings, Adani Ports, Ambuja Cements, Kotak Mahindra Bank, YES Bank, Maruti Suzuki, Bharti Airtel, Bharti Infratel, Wipro, HCL Tech, Bajaj Auto, Bajaj Finance and Bajaj Finserv are among the heavyweights who will release their quarterly September figures during the week. Earnings figures have been mixed up to now. Any positive surprise should be a booster for the market.

ECB rate decision
The European Central Bank (ECB) will announce Thursday its decision on interest rates in a chaotic climate around Brexit. Although no change in monetary policy is expected at the moment, the ECB will have to calculate the risk that Brexit presents for the euro area economy. "Brexit is the big elephant in the economy hall of the eurozone. A lot of people are trying to figure out the many interest rate hikes that last for about a year, but ignore one of the major economic risks in the region, "said Karsten Junius, chief economist at Bank J Safra Sarasin. from Zurich. Bloomberg.

Global macro meter
The core CPI of the Bank of Japan will be released on Tuesday. The report on new home sales in the United States for September will be released Wednesday. In addition, markets will closely monitor US GDP growth in the third quarter on Friday. On the same day, data on actual US consumer spending will also be released. The Italian budget will also be on the agenda this week.

Low technical perspective
On the data sheets, bears appear on the driver's seat. "According to the weekly chart, Nifty has formed a negative candle with a long upper shadow, which indicates a marked negative reversal from the recent highs. The weekly RSI also sends out negative signals, "said Nagaraj Shetti, research analyst at HDFC Securities. The technical indicators always show more room for maneuver, even if a short rebound can not be ruled out. Support for Sensex / Nifty during the week is seen at 33,350 / 10,000 and resistance at 35,100 / 10,550. Bank Nifty would have a range of 24,150-25,860, said Vaishali Parekh, senior technical analyst at Prabhudas Lilladher.