Rising bond yields and corporate earnings missing out expectations on margin front dampened the market sentiment during last week. Supply chain hurdles, rising logistic costs and higher raw material prices have resulted in margin contraction for corporates. Current month F&O expiry and inflationary pressures could spurt volatility in markets. Domestic investors will look out earnings from Tech Mahindra, Dr Reddy�s Lab, Cipla, Maruti Suzuki and Axis Bank in the coming week. Week ahead, Japan and Eurozone will decide on monetary policy and the US will report Q3 GDP growth figures.
FIIs/FPIs have invested Rs. 131 billion in September 2021 and sold Rs. 23 billion in October 2021. Foreign Institutional Investors (FIIs) Derivative Statistics have shown a rise in the open interest in stock futures, stock options, index futures and index options. Implied volatility (IV) rose for put options in the last week and for call options. Rise in IV for put option and rise for call option shows unsteady support for Nifty at present levels.
Wallstreet indices Dow Jones and S&P 500 closed at record highs. Amex shares rose more than 6% with the company reporting better-than-expected earnings and revenues. While, Nasdaq fell on Friday, as Intel and Snap shares dragged the market. During the week, Dow Jones gained by 1.09%, Nasdaq up by 1.38%, and S&P 500 rose by 2%.
European markets closed on positive note on Friday taking the positive earnings from the US companies. During the week, FTSE fell by 0.41% and DAX down by 0.29%.
Increasing demand for oil and supply tightness is benefiting oil producers. Brent crude crossed USD 85 mark which was last seen in 2018. Higher natural gas prices and shortage of coal are supporting the oil prices upward rally. During the week, Brent crude prices gained by 1%.
Global Economy
The Eurozone current account surplus narrowed to EUR 17.6 billion in August 2021, from EUR 24.9 billion in the same month last year, as the goods surplus shrank to EUR 12.9 billion from 24.3 billion.
The IHS Markit US Services PMI climbed to 58.2 levels in October 2021, from 54.9 levels in the previous month and comfortably above market expectations of 55.1 levels.
The IHS Markit Eurozone Services PMI was down to 54.7 levels in October 2021, from 56.4 levels in the previous month and below market consensus of 55.5 levels.
Japan's consumer prices rose by 0.2% (Y-o-Y) in September 2021, rebounding from a 0.4% drop a month earlier and posting the first annual gain since August 2020.
US crude oil inventories fell by 0.431 million barrels in the week ending 15th October 2021, the first decline in four weeks and compared with market forecasts of a 1.857 million increase, data from the EIA Petroleum Status Report showed.
