Geo-political tensions, earnings to drive equities
Mumbai: The ongoing earnings results season, along with the heightened geo-political tensions in the Middle East and a key macro-economic inflation data point are expected to influence the Indian equity markets' trajectory during the coming week, analysts opined.
"Next week the focus will again be on earnings, with IndusInd Bank setting the tone for bank earnings, especially on the fresh loan loss provisions," Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
"The oil prices would be watched closely for any flare-up due to geo-political (events). Some of the macro-data has been encouraging, which would keep the sentiment buoyant."
Companies like ACC, Mindtree, Cyient and Tata Consultancy Services are expected to announce their fourth quarter (Q4) earning results in the coming week.
"The earnings recovery was elusive for the last few years, even though the market scaled new heights at every interval," Vinod Nair, Head Of Research at Geojit Financial Services, told IANS.
"However, the last two quarters have given some ray of hope to investors for a pick-up in earnings given better-than-expected GDP growth and normalisation in GST implementation. Q4 PAT growth expectation for Nifty50 and Sensex companies is around 15 per cent YoY."
According to D.K. Aggarwal, Chairman and Managing Director of SMC Investments & Advisors: "The upturn in the economy and a favourable base effect notwithstanding, the Q4FY18 earnings, particularly from FMCG companies, are expected to see a healthy growth."
"Nifty is expected to move in the range of 10,300-10,600 points and Bank Nifty to trade in the range of 24,700-25,300 points."
Besides the Q4 results, investors will look out for the upcoming macro-economic data points -- Wholesale Price Index -- on Monday. The Balance of Trade figures will also influence sentiments. The trade data was released after the close of market hours on Friday.
On technical levels, the underlying trend of the National Stock Exchange's (NSE) Nifty50 remains bullish.
"Technically, the Nifty remains in uptrend and further upsides are likely once the immediate resistance of 10,618 points is taken out," said Deepak Jasani, Head of Retail Research for HDFC Securities.
"Crucial support to watch for any weakness is at 10,276 points."
Last week, the key Indian equity indices -- the Bombay Stock Exchange (BSE) Sensex and the NSE Nifty50 -- rose for the third consecutive week as healthy macro-economic data as well as fading global trade war fears boosted investors' sentiments.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE surged by 565.68 points or 1.68 per cent to close at 34,192.65 points.
Similarly, the wider Nifty50 of the NSE)made healthy gains. It closed trade at 10,480.60 points -- up 149 points or 1.44 per cent from its previous week's close.