Indian equity benchmarks moved further away from record highs touched earlier last week. Consumer and metal stocks dragged the headline indices lower though gains in the banking basket curbed the losses. The midcap gauge saw its worst week in a year.

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For the week, the Sensex index lost 484.3 points or 0.8 percent to settle at 60,821.6, and the broader Nifty50 benchmark shed 223.7 points or 1.2 percent to 18,114.9. The 50-scrip index is now 2.6 percent below its all-time high, touched on October 19.

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Dalal Street week ahead

The week will begin with the Street reacting to Reliance Industries and ICICI Bank results, which came out during the weekend.

All eyes will be on financial results from India Inc with around 700 companies due to post their quarterly earnings this week. Among the largecap firms due to report their Q2 results are ITC, Maruti Suzuki, Tech Mahindra, Axis Bank, Bajaj Finance, Kotak Mahindra Bank, Punjab National Bank, Vedanta, GAIL Indian Oil, Cipla and Adani Enterprises.

Headline indices may remain rangebound as they struggle to find a footing this week. "After exceeding the 40,000 mark for the first time, Bank Nifty is likely to be in the limelight this week as various banks announce their results," said Yesha Shah, Head of Equity Research at Samco Securities.

A favourable earnings outlook can be expected from the banking space, given the improvement in economic activity, enhanced collection efficiency and stabilised asset quality. Volatility may linger with the monthly expiry coming up, added Shah.

Monthly futures & options contracts are due for expiry on Thursday, October 28.

Some sectoral rotation is visible where some money is moving from stocks with expensive valuations towards banking names, finding comfort in valuations and strong earnings, said Santosh Meena, Head of Research at Swastika Investmart.

Technical outlook

The Nifty50 index has formed a dark cloud cover candlestick pattern on the weekly chart, hinting at a short-term reversal, but follow-up moves are awaited for confirmation, said Meena.

"On the daily chart, it is trading near critical support at 18,000-17,950 where we can expect a bounceback. On the upside, 18,250-18,300 will be the immediate supply zone while 18,400-18,450 will be the next resistance zone. If Nifty slips below 17,950, there is a risk of any meaningful correction where 17,600 will be the next important support level," he said.

Here are the key factors and events that are likely to influence Dalal Street in the week starting October 25:

DOMESTIC CUES

Q2 Earnings

Here are some of the companies that will report their financial results this week:

Monday: Tech Mahindra, HDFC AMC, Coforge and Aditya Birla Sun Life AMC

Tuesday: Axis Bank, Bajaj Finance, Kotak Mahindra Bank, Central Bank of India, Cipla, Dr Lal Pathlabs, Ambuja Cement, Birlasoft and Persistent

Wednesday: ITC, Maruti Suzuki, Bajaj Auto, PNB, IndusInd Bank, Indian Overseas Bank, SBI Life, Adani Enterprises, Adani Ports, Lupin, Tata Chemicals, Deepak Nitrite, Raymond and Exxaro

Thursday: Adani Green, Adani Total, DLF, IndiGo, Marico, Tata Power, Zydus, NTPC, RBL Bank, Zee Entertainment Enterprises, JK Tyre, Renuka Sugars, Chalet Hotels and CarTrade

Friday: GAIL, JSW Energy, SAIL, Shree Cement, UPL, Vedanta, Coal India, Adani Power, Adani Transmission, Apollo Tyres, Bandhan Bank, Voltas, Escorts and Dixon

Saturday: Indian Oil, IDFC First Bank and Muthoot Finance

Macroeconomic data

Data on eight core sectors -- a subset of industrial production data -- will be released on Friday. These are: coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity.

FII flow

Fund flow will be in focus once again, as foreign portfolio investors (FPI) have turned relatively bearish on Indian equities. They net offloaded Indian shares worth Rs 2,331.1 crore ($310.1 million) so far this month. In September, FPIs' net purchases had stood at Rs 13,154 crore ($1.8 billion).

Corporate action

GLOBAL CUES

Data on US housing prices is due on Tuesday. On Wednesday, the UK will discuss its spending plan.

On Thursday, Bank of Japan is scheduled to make a decision on key interest rates. On the same day, advanced estimates of GDP in the US will be released.

Japan's consumer confidence data is due on Friday.

Updates on crude oil rates and the troubled Chinese property developer Evergrande will be watched closely. The company's next bond interest payment deadline is October 29, due the the expiration of the 30-day grace period on its September 29 coupon, according to news agency Reuters.

(Edited by : Aditi Gautam)

First Published:Oct 24, 2021 2:04 PM IST