Week Ahead: Q4 Results, macro data, Israel-Iran conflict, global cues among key market triggers this week

livemint.com:

domestic equity benchmarks settled flat last week as investors' hope for a June rate cut were dashed by higher-than-expected inflation in the US, compounded by positive US employment and manufacturing data. Escalating geopolitical tensions in the Middle East, alongside supply concerns, have propelled crude oil prices upward, impacting the overall market sentiment.

Also Read: Oil traders stay bullish as Brent hovers at $90: ‘Crude to stay elevated even if Middle-East tensions cool down’ Gold prices also experienced an uptick due to geopolitical uncertainties, increased central bank purchases, and heightened safe-haven demand. Consequently, emerging markets witnessed a late-week consolidation.

Conversely, European markets demonstrated strong performance, buoyed by indications from the ECB suggesting a potential rate cut in the near term. On the domestic front, foreign investors are exercising caution given the subdued expectations for Q4 results and the premium valuations of mid- and small-cap stocks.

Within the IT sector, consolidation persists due to lacklustre Q4 earnings amid slowdowns in spending and uncertainties surrounding US policy rates. Vinod Nair, Head of Research at Geojit Financial Services said, ‘’Profit-taking is evident in banking stocks, particularly in PSU banks, as the banking sector’s loan growth is moderating, and valuation has surpassed long-term averages.'' Also Read: FPIs pump ₹13,347 crore in Indian equities, debt flows reduce in April so far: Will inflows continue in FY25? ‘’Conversely, the auto and realty sectors are showing resilience, driven by expectations of strong earnings momentum.