Rupee Value Against US Dollar Will Impact Investors’ Risk-Taking Appetite

Mumbai: Tensions in the Middle East, coupled with the release of key macro-economic inflation data points and the ongoing quarterly results season, are expected to determine the trajectory of equity indices next week.

Market observers opined that the rupee's value against the US dollar, along with crude oil prices and the direction of foreign funds, will also impact investors' risk-taking appetite.

"Developments in the Middle East will remain the top-most priority for investors post the US-North Korean tensions," Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

"All eyes will be on Saudi Arabia, as any escalation in the regional stand-off will trigger volatility in global trade." Apart from the geo-political tensions, investors will look out for the upcoming macro-economic inflation data point of Consumer Price Index (CPI).

"For the week ahead, CPI and WPI (Wholesale Price Index) inflation are key data to be watchful of... CPI and WPI are expected to rise," said Vinod Nair, Research Head at Geojit Financial Services.

The Central Statistics Office (CSO) is slated to release the macro-economic data points of CPI on Monday, November 13. On Tuesday, the Commerce Ministry will release the WPI data and Balance of Trade figures.

Besides the macro-data points, further depreciation in rupee's value against the US dollar and outflow of foreign funds can make investors nervous.

On a weekly basis, the Indian rupee had weakened by 61-62 paise to close at 65.16-17 against the US dollar.

In terms of foreign equity investment, provisional figures from the stock exchanges showed that FIIs off-loaded stocks worth Rs 4,043.5 crore.

In addition to the Indian currency's movement, the ongoing quarterly results will have major influence over investors' sentiments.

Companies like Adani Ports, Idea Cellular, NTPC, Tata Chemicals, Bank of Baroda, GAIL (India), Godrej Industries, Sun Pharmaceutical and Tata Global Beverages are expected to announce their quarterly results in the coming trade week.

Technical charts show that last week's correction has turned investors cautious with Nifty's next support level seen at 10,179 points.

"Technically, with the Nifty beginning to correct, the sentiments have turned cautious," said Deepak Jasani, Head of Retail Research for HDFC Securities.

"The next support for the Nifty could be at 10,179 points while on upmove, it could face resistance at 10,453 points."

Last week, the key Indian equity indices -- the BSE Sensex and the NSE Nifty -- fell as investors were spooked by rising crude oil prices amid geo-political concerns.

Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) declined by 371 points, or 1.10 per cent, to close at 33,314.56 points.

Similarly, the broader Nifty50 of the National Stock Exchange (NSE) receded by 130.75 points, or 1.25 per cent, to close at 10,321.75 points.

IANS