The ongoing Q4 earning season coupled with the expiry of April derivative contracts on Thursday will lead to a high degree of volatility and choppiness in this week. The second phase of the Budget session of the Parliament will begin today and market participants are hoping for the passage of GST bill, which will give a big boost to the economy in the long run. A US Federal Reserve meeting which is scheduled on Tuesday and Wednesday is among the other key event, the markets will keep a close watch on.
"Q4 earnings, outcome of US Federal Reserve meeting and trend in global markets will set the trend for the market in the coming week. Initially market will react to the result of index major, Reliance Industries earnings in early trades on Monday and that will set the next directional move in index after the recent consolidation,” said Vijay Singhania, Founder-Director, Trade Smart Online
“Initially market will react to the result of index major, Reliance Industries earnings in early trades on Monday and that will set the next directional move in index after the recent consolidation. Having said that, chances of major decisive move is less, considering the present market structure and existence of major technical hurdle around 8000 in Nifty. We have seen a superb rally over the past two months and now all eyes are on how the earnings season pans out”, he added.
Jayant Manglik, President, Retail Distribution, Religare Securities Ltd. was of the view that traders will first react to the results of oil & gas major, Reliance Industries. Plus, we have long list of corporates like Axis Bank, Biocon, IDFC Bank, Bharti Airtel, Yes Bank, ACC, Ambuja Cements, Dabur, HCL Tech, Vedanta, ICICI Bank, who’ll be announcing their numbers alongside with others during the week.
“The earnings season will pick up steam and would be a key driver for individual stocks apart from global factors like Crude Oil influencing the broader market direction. There would be some more private sector banks reporting numbers and it would be interesting to see the trends in one of the most critically important sector in the economy,” said Pankaj Sharma, Head of Equities, Equirus Securities.
The "trend in theglobal market, investments by FIIs and DIIs, the movement of rupee against dollar and crude oil price will dictate the trend in the near term. Moreover, the market may remain volatile ahead of the expiry of derivative contracts for the month of April," said Rohit Gadia, Founder & CEO, CapitalVia Global Research.
Clearly, a mixed sentiment prevails and in the increased volatility driven by news cues, investors would better gain through a wait and watch approach. The focus should be on management commentary and outlook, rather the earnings. Key corporate earnings of companies including UltraTech Cement, Axis Bank, Maruti Suzuki India, Bharti Airtel, Yes Bank,. ACC and Ambuja Cements, Idea Cellular and ICICI Bank could be cues to be watched this week..
Market valuation of top Five Companies declines by Rs 38,969 cr
The combined market valuation of five of the top-10 most valued Indian companies declined by Rs 38,969 crore last week, with IT major TCS taking the steepest hit. While TCS, RIL, ITC, Sun Pharma and HUL suffered losses in their market capitalisation (m-cap) for the week ended Friday, Infosys, HDFC Bank, ONGC, CIL and HDFC made gains. The m-cap of TCS tumbled Rs 20,876.69 crore to Rs 4,76,291.84 crore, emerging as the worst hit among the top-10 entities.
RIL's valuation plunged Rs 8,651.8 crore to Rs 3,36,593.97 crore and that of ITC tanked Rs 4,224.79 crore to Rs 2,62,097.53 crore. The m-cap of Sun Pharma declined by Rs 2,791.74 crore to Rs 1,97,382.93 crore and HUL lost Rs 2,423.61 crore to Rs 1,91,356.95 crore. In stark contrast, Infosys saw a spurt of Rs 9,601.23 crore to Rs 2,78,814.63 crore in its valuation. CIL added Rs 6,821.68 crore to Rs 1,81,753.39 crore and HDFC (Rs 2,875.31 crore to Rs 1,78,743.11 crore).
The m-cap of HDFC Bank went up by Rs 2,793.64 crore to Rs 2,76,153.81 crore and that of ONGC climbed Rs 2,694.98 crore to Rs 1,84,926.92 crore. In the ranking of top-10 firms, TCS held on the pole position followed by RIL, Infosys, HDFC Bank, ITC, Sun Pharma, HUL, ONGC, CIL and HDFC. Meanwhile, the Sensex extended its gains for the second straight week, surging 211 points to end at 25,838.14.
Pankaj Sharma, Head of Equities, Equirus Securities.
The parliament session is set to begin today and the recent events in Uttarakhand could cast a shadow on the business in both the houses. The principal opposition party, Congress would use every opportunity to embarrass the central Govt on the issue of "President's Rule" in the state. In general, even other non-Govt parties could also raise the issue of mismanagement of drought situation in the country and insufficient support from the central Govt. Because of these reasons, we don't really expect much progress on key legislations including GST in next few weeks. The earnings season will pick up steam and would be a key driver for individual stocks apart from global factors like Crude Oil influencing the broader market direction.
Jimeet Modi, CEO, SAMCO Securities
The market had run up too quickly in the short term and therefore it is very likely that the correction has set in for the immediate short term. Corporate results are mixed and seems to be discounted, thus leaving little room for near term upside. Some of the heavy weights that are expected to announce the results next week are Ultratech, ACC, Ambuja Cements, Yes Bank, Axix Bank, Maruti etc which will set the trend for the week. There seems to be near term caution for the bulls.
Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd.
The market may remain volatile ahead of expiry of derivative contracts as traders may roll over their position from near to next month contracts. Stock specific movement can be observed as India bulls Housing Finance, India bulls real estate, ACC, ICICI Bank, Axis Bank, Yes Bank etc. will declare their quarter four numbers in upcoming week. Technically, the Nifty future has sustained above its 200 days moving average this week which is lying near the level of 7870 and is facing strong resistance at the level of 8000. Any fall below the 7850 support mark can result in some correction in index till the next support level of 7790, while with the crossing of major resistance of 8000, it may test the level of 8150.
Jayant Manglik, President, Retail Distribution, Religare Securities Ltd.
The market will react to the result of index major, Reliance, in early trade today and that may result in the next directional move in index, after the recent consolidation. Having said that, chances of a major decisive move is less, considering the present market structure and existence of a major hurdle around 8000 in Nifty. So, we reiterate our advice to concentrate on stocks and gradually accumulate quality counters from private banking, finance and auto space.