Wipro's strong earning and share buyback offer and Reliance Industries highest quarterly earnings and the announcement of a virtually free 4G feature phone boosted market sentiments. HUL reported 9% PAT increase, Ultratech 15%, Reliance Ind 28%, RBL Bank 45%, Bajaj Finance 42% and Bajaj Finserve reported 22% increase in their respective quarterly net profits.
Last week the Sensex rose by 8.14 points, or 0.02 per cent, while the Nifty was up by 28.90 points, or 0.29 per cent.
“Earnings from blue-chip companies and roll-over of positions in the derivative segment will dominate the market sentiments in the coming week. In the coming week, earnings for June 2017 quarter (Q1FY18) will continue to dominate the market sentiments as heavyweights stocks like ICICI Bank, HCL Tech, Yes Bank, Maruti, ONGC, Axis Bank, Hero Motocorp and Dr Reddy are scheduled to release their quarterly earnings. Close to 500 companies are expected to announce their June 2017 earnings next week,” said Vijay Singhania, Founder-Director, Trade Smart Online.
Trading in the coming week is likely remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month July 2017 series to August 2017 series. The near month July 2017 derivatives contract expire on Thursday, he added.
"This week is likely to remain highly volatile ahead of several bluechip companies who have aligned their June quarter corporate earning calendar in the week. Hence, we expect market to trade with positive bias and likely to take cues from the earnings calendar," said Abnish Kumar Sudhanshu, Director and Research Head, Amrapali Aadya Trading & Investments.
On the global front, Japan Manufacturing PMI data for July 2017 will be unveiled on Monday. While US Manufacturing PMI data for July 2017 will also be unveiled on Monday. The US Federal Reserve will announce its interest rate decision on Wednesday.
"Going forward, market movement would be dependent on stock specific actions such as results," said Teena Virmani, Vice President PCG Research, Kotak Securities.
"The quarter earnings growth may not match the current premium valuation due to a tepid start to result season. Currently, investors are giving more weight to the prevailing positive macros which is maintaining a positive vibe in the market. However, there is a chance of consolidation in the near-term due to ongoing quarter results; US FED policy and OPEC meet next week. Sensex FY18 EPS forecast is very high at 20% while preview for Q1 is dull which will lead to downgrade," said Vinod Nair, Head of Research, Geojit Financial Services.
Four of top-10 cos lose Rs 61,931 cr in mcap; ITC hit hard
The combined market valuation of four of the top-10 Indian firms plummeted by Rs 61,930.86 crore last week, dragged down mainly by ITC which alone took a hit of Rs 58,902.54 crore.
While ITC, HDFC, State Bank of India (SBI) and Maruti Suzuki India suffered losses in their market capitalisation (m-cap) for the week ended Friday, RIL, TCS, HDFC Bank, HUL, Infosys and ONGC together added Rs 54,899.59 crore. However, their cumulative gain was less than the total loss suffered by the four firms.
ITC emerged as the worst hit among the top-10 entities as its m-cap crashed Rs 58,902.54 crore to Rs 3,50,868.47 crore.
During the last week shares of ITC fell by over 14 per cent. On Tuesday itself, the stock had plunged nearly 13 per cent on worries over increase in cess on cigarettes.
FPIs pour $2.4 bn in Jul; total inflow reaches $25 bn this year
Overseas investors have pumped in USD 2.4 billion in the capital markets this month, enthused by trouble-free roll-out of GST and on hopes of better corporate earnings, taking the total to USD 25 billion so far this year.
The latest inflow follows net infusion of Rs 1.6 lakh crore in the previous five months (February-June) on several factors. In January, they had pulled out over Rs 3,496 crore. Dinesh Rohira, Founder and CEO, 5nance.Com has attributed the latest inflow to stimulating Indian economy.
Besides, he said, investor sentiments remained upbeat due to the trouble-free roll-out of the Goods and Services Tax from July 1. Investors expect blue-chip companies to post encouraging first quarter numbers in the coming days. On top of it, monsoon progress so far has been above-normal, said Anand James, Chief Market Strategist, Geojit Financial Services.
According to latest depository data, FPIs invested a net Rs 2,977 crore in equities during July 3-21, while they poured Rs 12,371 crore in the debt markets review, translating into a net inflow of Rs 15,348 crore (USD 2.4 billion). With the latest inflow, total investment in the capital markets (equity and debt) has reached Rs 1.63 lakh crore (USD 25 billion) this year.
Rohira said however that the recent development on incoming global macro data indicates a sign of revival in some developed countries which is expected to pose a hurdle for Indian market as FPI may shift their investment avenue. Further, the inflow from FPI is expected to remain subdued with depreciating US currency against the Indian rupee, he said.
However, Himanshu Srivastava, Senior Research Analyst - Manager Research, Morningstar Investment Adviser India, said that he does not expect any dramatic change in the FPI inflow trend over the next couple of months.
There are few areas which FPIs will focus on -- impact of GST on the economy in the short run; economic growth has not yet picked up, which is contrary to the expectation, and they would want to see signs of improvement in it.
"Also, US Federal Reserve has hiked rates so far three times and more rate hikes could see some money moving out of emerging markets. Rupee is also appreciating and with markets surging too, profit booking at regular intervals will also happen," he added.