Share market update for next week: Five things you need to know

Virus fears took a back seat as optimism over quarterly earnings led Sensex and Nifty to close higher for this week. Consumer durables and oil and gas stocks logged maximum gains with IT stocks witnessing profit booking after two days of rally. While Sensex ended 548 points higher at 37,020, Nifty rose 161 points to 10,901.

Led by bullish Asian and European stock markets, domestic markets closed higher suppressing the concerns over surging domestic coronavirus cases that crossed the 1 million mark this week. Tata Steel, followed by ONGC, HCL Tech, Bajaj Finance, HUL, HDFC duo, Reliance Industries and ICICI Bank were among the top gainers. On the other hand, Infosys, TCS, M&M and Tech Mahindra were among the laggards. On the currency front, rupee ended higher at 75.02 per dollar as against the earlier close of 75.19 per dollar.

Ajit Mishra, VP-Research, Religare Broking, said, "Markets managed to settle in the green for the fifth successive week, supported by upbeat global cues and a positive start to the earnings season. It was more of the consolidation bias in the index for most of the week however the strong earnings show from IT majors like Infosys and Wipro played a critical role in boosting the market sentiment in the final sessions."

Here are the top 5 factors that will lead the stock market in the upcoming week:

Global cues

Besides concerns over the rising spread of coronavirus, the on-going earnings season and global cues will continue to dictate the market trend.

Overseas, Asian shares and US stock futures bounced back on Friday as hopes of more government spending globally and hopes of a COVID-19 vaccine boosted investor sentiments. Although, gains were under check due to concerns over rise in new coronavirus cases and worsening tensions between Washington and Beijing.

In Asian counterparts, barring Japan's Nikkei and Singapore's Strait Times, all the other major indices closed the week higher. Wall Street ended positive, suppressing concerns over rising US coronavirus cases, cushioned by hopes for an early vaccine that managed to keep the momentum upward. European indices closed mostly in green, are tracking positive global cues.

Rossari Biotech listing

Besides the equity market, investors will be excited for the Rs 496-crore IPO listing of the speciality chemical maker Rossari Biotech next week on July 23. The basis of allotment of the IPO is expected to take place on July 20. This would be the first listing during the lockdown and second after SBI Card in 2020.

The initial public offering (IPO) of Rossari Biotech was subscribed over 79 times on the last day of bidding on Wednesday. The issue size is expected at around Rs 494-Rs 496 crore. The face value of each share is Rs 2. Company's market capitalisation is pegged at Rs 2,207 crore.

Quarterly earnings

On the earnings front, while most of the major result announcements have been published for the quarter ended March 2020, investors will keep an eye on the shares of companies now publishing financial results for June quarter of FY21.

While ACC, SBI Cards will report Q1 results on July 20, Axis Bank, Bajaj Finance, Bajaj Finserv, HDFC Life, ICICI Prudential Life, Hindustan Unilever, SBI Life will report April-June earnings on July 21. On July 22, Bajaj Auto, Larsen & Toubro will post Q1 figures, while ITC, Ambuja Cements, Asian Paints, JSW Steel, Zee Entertainment, ICICI Bank will report on July 23. With no major event, the progress of monsoon will also be closely watched.

COVID-19 trend

In recent trades, the equity markets worldwide expressed optimism on news of vaccine development and better-than-expected economic data across countries. Although, the challenges with respect to rising COVID-19 cases and recovery of economic growth and any extension or resetting of lockdown measures will continue to add worries.

India's COVID-19 tally climbed to 10,38,716 on Sunday with  26,273 deaths. Meanwhile, the World Health Organisation (WHO) reported a record daily increase in global coronavirus cases for the second day in a row with global coronavirus cases crossing to 14 million, including 597,105 deaths.

Technical View

During the last week, the 30-share BSE index advanced 425.81 points, or 1.16 per cent. Nifty ended 1.51 per cent up with a bullish body candle. The broader benchmark is expected to range-bound with positive bias in the band of 11,100 to 10,530. Nifty's support is placed at 10,530, 10,450 and resistance at 10,980 and 11,100.

India VIX, a fear gauge index, fell further to 24 levels, lowest since 05 March 2020. HDFC Securities said in its note and added that, "This indicates that expectation of volatility has reduced significantly. This in turn indicates the possibility of a sharp fall in the market has also reduced as compared to the last few months."

Ajit Mishra of Religare Broking said, "Finally with Friday's late surge in banking conglomerates, Nifty has confirmed a breakout above 10,850, which resembles a 'Bullish Flag' pattern on the daily chart. Now, the banking seems to have regained strength which we believe should lead the movement in the forthcoming week. As far as levels are concerned, the up move should ideally get extended towards the 78.6 per cent retracement zone at 11,100-11,200."

Sensex closes 548 points higher; Nifty at 10,901; ONGC, Titan, RIL top gainers

Aim to gain market share, protect supply chain, preserve cash, says Sun Pharma