Q1 earnings, inflation figures, global cues to dictate markets next week

Domestic equity market this week will be influenced by macro data announcements, including inflation number for June, first quarter earnings from companies, global trends and foreign funds movement

Trading activity in the domestic equity market this week will be influenced by a host of macroeconomic data announcements, including inflation number for June, first quarter earnings from companies, global trends and foreign funds movement, analysts said.

Besides, other key factors like rupee-dollar trend and Brent crude oil price will also guide market sentiments, they added.

"This week, participants will first react to TCS numbers. Besides, macroeconomic data viz. IIP and CPI on July 12 and WPI on July 14 will be in focus. Apart from domestic factors, global cues like performance of the US markets, crude movement etc will remain on the radar," said Ajit Mishra, VP - Research, Religare Broking Ltd.

India's largest IT services firm Tata Consultancy Services (TCS) on Friday reported a 5.2 per cent year-on-year rise in consolidated net profit to Rs 9,478 crore for the first quarter ended June 30.

It reported a 16.2 per cent growth in revenue at Rs 52,758 crore for the quarter, with all the big geographies and business segments reporting strong numbers, but it was operating profit margins, which slid down to 23.1 per cent -- much lower than the aspirational band of over 26 per cent -- that hurt the profit growth.

Brokerage firm Prabhudas Lilladher said the company has missed on both revenue and margins in the June quarter results.

On the earnings front, ACC, HCL Technologies, Jindal Steel and Power, MindTree, Federal Bank and HDFC Bank will announce their Q1 numbers during the week.

"... IIP and CPI numbers will be announced on 12th July whereas WPI will be announced on 14th July. On the global front, US CPI number, IIP and job numbers will be key factors," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Apart from this, FIIs' behaviour and direction of the rupee and crude oil prices will be other important factors, he added.

Last week, the BSE Sensex advanced 1,573.91 points or 2.97 per cent, while the NSE Nifty climbed 468.55 points or 2.97 per cent.

Apurva Sheth, Head of Market Perspectives, Samco Securities, said, "This week is going to test the market in a number of ways as a multitude of important events are lined up. The USA's much-anticipated inflation numbers and the jobless claims data will keep the global markets on their toes."

"The inflationary problem is not just restricted to the West, thus the Indian inflation numbers... will also keep the markets back home busy," he noted.

Quarterly results will influence market sentiment. The management commentary on future earnings growth trajectory will be of interest to Dalal Street, Sheth added.