Key bills and quarterly earnings to influence markets’ trends

Mumbai – Quarterly earnings’ results, along with the government’s ability to break the parliament’s logjam and inflow of foreign funds, are expected to set the tone for the Indian equity markets during the upcoming week.

Market observers, pointed out that investors are expected to closely track the next batch of the fourth quarter (Q4) results.

Companies like HDFC, Eicher Motors, Adani Ports, Adani Power, Hero MotoCorp, MRF, Godrej Consumer Products, Kotak Mahindra Bank and Century Textiles are expected to announce their Q4 results in the coming week.

“The week would again focus on earnings with the global central banks decisions out of the way now,” Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.

“Earnings so far have largely been beating the expectations, but its too early to conclude a trend. The ratio of downgrades to upgrades have been gradually improving.”

Apart from the Q4 results, global macro-economic data would influence investors’ sentiments, said Vaibhav Agarwal, vice president and research head at Angel Broking.

“Markets will continue to react to global cues with PMI (purchasing managers index) manufacturing data of China and Germany along with GDP (gross domestic product) of Eurozone coming out next week,” Agarwal said.

Pankaj Sharma, head of equities for Equirus Securities pointed out that government’s ability to pass key economic legislation during the upcoming week, will also dictate the markets’ movements.

“Except for some regular non-controversial business going through, the parliament session has not been very successful so far,” Sharma said.

For next week, the parliament is expected to discuss demands for grants and working of eight ministries. Finance Bill is also expected to be taken up.

The government is desirous of pushing through major economic legislation like the bankruptcy code and Goods and Services Tax (GST) Bill during the ongoing session.

However, the political stalemate has reduced the chances of the key bills getting through this session.

For last week, global headwinds, combined with the logjam in parliament and profit booking, depressed the Indian equity markets.

This resulted in the equity markets to trade in a narrow range and end flat — marginally in the red.

The barometer 30-scrip sensitive index (Sensex) of the BSE had declined by 231.52 points or 0.89 percent to 25,606.62 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) slipped by 49.5 points or 0.62 percent to 7,849.80 points.

Nitasha Shankar, senior vice president for research with YES Securities, told IANS that last week the headline index Nifty oscillated in a ‘rising wedge’ pattern and currently is placed at the lower end of the pattern i.e. 7,800 points.

“Breakdown from the pattern may lead to corrections. A sustained trade above the lower end of the range may extend the range bound movement,” Shankar cited.

According to Dhruv Desai, director and chief operating officer, Tradebulls, the equity markets are expected to remain cautious on sluggish global cues.

“We expect volatility to rise over the coming few sessions and markets to remain range bound,” Desai said.

In addition, market observers, elaborated that softness in US dollar strength will support a healthy rise in foreign fund inflows. A rise in foreign capital into the equity markets is expected to lift prices.

For the week ended April 29, a healthy rise in foreign funds’ inflow was witnessed. The increase in inflows supported prices and countered global headwinds.

Data with stock exchanges revealed that FPIs (Foreign Portfolio Investors) purchased stocks worth Rs.1,060.89 crore during the week ended April 29.

Figures from the National Securities Depository Limited (NSDL) showed that the FPIs invested Rs.1,681.68 crore or $252.48 million in the equity markets from April 25-29.