BSE Sensex and NSE Nifty are likely to open on a flat note on Wednesday amid mixed global cues. While the benchmarks in the US closed on a mixed note in the previous session, equities across Asia Pacific region opened on a flat note with positive bias.

TCS to set the tone

According to analysts, the focus is now on the domestic events, especially Q4 results, as there are no clear indications from the global markets.

IT major Tata Consultancy Services (TCS) is likely to declare its quarterly results post market hours. The results will set the tone for the next few days, analysts said.

“US stocks are mixed ahead of the inflation report which is likely to support one more rate hike by the Fed. Today’s headlines have nothing new to say to the Wall Street: IMF trimmed its growth outlook, Fed’s Williams supported one more hike, and CarMax earnings showed consumers are leaning towards older vehicles,” said Edward Maya, Senior Market Analyst, The Americas OANDA. 

Nifty 50 rose for the seventh consecutive session on Tuesday on the back of a positive sentiment in the global markets.

Eyes on the sky

“We expect the market to remain positive to sideways with start of Q4 earning season. Investors would watch for release of inflation data by the US, China and India to get cues on the actions of central banks. Investors are also looking forward for FOMC meeting minutes for further insights,” said Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services.

SGX Nifty in the 17790-17820 range indicates another flat but positive opening. Nifty April futures on Tuesday closed at 17788. 

According to analysts, the focus will be on small-cap and mid-cap space as some see value in beaten down stocks.

After Skymet’s below-normal monsoon prediction, the Indian Meteorological Department has predicted normal monsoon, bringing relief to anxious investors.

“The Indian Meteorological Department has forecast a fourth straight year of a normal monsoon, bringing some relief to the economy grappling with high food inflation and slowing global growth,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

Also read: Stocks that will see action today (April 12, 2023)

Quantitatively, the southwest monsoon seasonal rainfall between June and September is likely to be 96 per cent of the long-period average with a model error of plus or minus 5 per cent, IMD said.

According to Mittal Shah, Head of Rearch, Reliance Securities, much would depend on the rainfall distribution over the months of June-September.

Late onset or deficient rainfall in the middle of the season would impact crops and consequently rural incomes. This could impact sectors such as sectors such as fast-moving consumer goods (FMCG), consumer durables and automobiles which derive significant revenues from rural markets and other sectors that are directly dependent on agriculture such as agrochemicals, fertilizers and sugar.

On the flip side, deficient rainfall in the second half will help the construction sector, benefiting the infrastructure and allied sectors such as building materials and cement.

“Higher temperatures due to deficient rainfall will lead to higher power demand and boost sales of ACs, refrigerators, soft drinks and ice creams. In the short-term, the markets would closely follow the monsoon arrival date and its progress across the country,” he added.

Bullish undertone

“Nifty overcame the hesitation seen on the previous day and marched ahead. It could now stay in the 17639-17800 band in the near-term waiting for economic data like India CPI and IIP and US CPI (due April 12) for further triggers,” said Jason.

According to experts, foreign portfolio investors will continue their buying spree for some more days. According to them, they will indulge in sector rotation.

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