The domestic market ended in the red for the week-ended April 23, amid concerns over record jump in Covid cases, increasing lockdown-like restrictions across states and the sombre global market mood. Both Sensex and Nifty declined nearly 2% for the week.
Going into the trade this week, analysts expect the nervousness among traders may continue and do not see the volatility easing out.
March quarterly earnings, Covid-19 related updates and global trends are among key factors that are likely to guide the market this week, while the monthly expiry of April derivatives contracts will keep the traders on their toes. Besides, movement in rupee, crude and FII flows could also have a bearing on the market trajectory.
As D-Street enters the thick of the earnings season, nearly 130 companies are slated to post their March quarter numbers this week, including some big names like Reliance Industries, HUL, Tech Mahindra, Axis Bank, Maruti, Bajaj Auto, Titan and IndusInd Bank.
Besides earnings, Covid-related developments will remain on the market participants’ radar. The pandemic is worsening in the country while a lack of oxygen is adding to the mounting death toll. India is reporting 3 lakh Covid cases almost every day, a record seen by no country in the world. If the trend persists, it could further dent market sentiment. That apart, the pace of vaccination will also be eyed.
Amid rising Covid cases, the pace of FPI outflows has also gathered steam. So far in the month of April, they have been net sellers to the tune of over Rs 7,600 crore, after having a robust buying in the previous six months. The selling by FPIs could lead to further caution and volatility in the market.
Meanwhile, on the data front, investors will track the core sector data that will be unveiled on April 30 which may result in some stock-specific movement. Auto stocks are likely to be in focus on Friday ahead of the release of April auto sales figures on May 1. US GDP data for Q1 is also slated to be out this week.
Lastly, the Federal Reserve's two-day meeting, slated for April 27-28, is one of the key factors globally to watch out for this week. Experts largely expect Fed Chair Jerome Powell to keep its interest rates near zero levels and continue with the bond purchases plan. However, a change in rates can have a bearing on emerging markets like India.
And now, let's take a look at the trade setup for today.
Stocks in Asia drifted higher as investors look for clues on the economic recovery in a big earnings week and a Federal Reserve meeting. Japan's Topix index was flat, South Korea's Kospi index rose 0.5% and Shanghai Composite Index added 0.3%. U.S. futures were little changed after most major groups in the S&P 500 advanced Friday.
Tracking positive Asian cues, Indian markets looked set to open on a firm footing with SGX Nifty ruling 57 points higher at 14,397, around 7.30 am.
On the stock-specific front, a total of 15 companies are slated to post their quarterly earnings today such as Tech Mahindra, SBI Card, HDFC Life.
Tech Mahindra is likely to post modest revenue growth in the fourth quarter of the financial year 2020-21, believe analysts, led by seasonal strength in Comviva, an entity acquired by the firm in 2012, and improving traction in the manufacturing, BFSI and technology segments.
ICICI Bank reported a nearly four-fold jump in its March quarter consolidated profit to Rs 4,886 crore as against Rs 1,251 crore in the year-ago period, and spoke of “calibrating” growth in the near term given the second wave of COVID-19 infections.
HCL Technologies on Friday posted a 6.1 per cent decline in consolidated net profit in March quarter to Rs 2,962 crore but said it is confident of logging double-digit growth in FY22 revenue on the back of a strong deal pipeline.
Srei Equipment Finance, a subsidiary of Srei Infrastructure Finance, has received an expression of interest for equity infusion of an undisclosed amount from global private investment firm Cerberus Global Investments, according to a regulatory filing.
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