Sheaf of corporate results to drive market sentiment

The Sensex on Thursday raced past the 61000 mark to end at at 61305, while the Nifty also ended a life-time high of 18338

Representational image.Shutterstock

TT Bureau   |   Mumbai   |  18.10.21: A sheaf of corporate results will be the main driver for the Sensex and Nifty which are on a record run, egged on by a rapid opening up of the economy and global cues though rising oil prices are a concern.

The Sensex on Thursday raced past the 61000 mark to end at at 61305, while the Nifty also ended a life-time high of 18338. The markets were closed on Friday for Dussehra.

“Quarterly results will dictate market sentiment and will be the talk of this week as they pick up the pace. D-Street will be all ears to any management insights to forecast the future earnings trajectory,” said Yesha Shah, head (equity research) at Samco Securities.

“With the anticipation that companies would keep up their momentum from the previous quarter into the second quarter, investors may see whipsaw movements (sudden reversal of direction) in the stock this week as results beat or miss market expectations,” he said.

Among major earnings to be announced this week are from Reliance Industries, UltraTech Cement, ACC, Hindustan Unilever Ltd, ICICI Pru Life, Nestle, Asian Paints, JSW Steel, ICICI Bank, Hindustan Zinc, IDBI, Bank of Maharashtra, South Indian Bank and  Federal Bank.

“If we talk about the cues for this week then quarterly earnings will dominate the market where the market will react to HDFC Bank and Avenue Supermarts earnings on Monday,” Santosh Meena, head (research) at Swastika Investmart Ltd, said.

He said other than earnings, global cues will be important where global markets have started to do well after a period of correction. Last week, the BSE benchmark rallied 1246.89 points or 2.07 per cent. Eight of the top-10 most valued companies together added Rs 1,52,355.03 crore in market valuation last week, with HDFC Bank and SBI the biggest gainers. 

“Banking will be the key sector under focus in the coming days as the sector is set to kick-start its earnings season. With the expectation of a strong recovery in corporate earnings, the Indian market is positioned to continue its bull run,” said Vinod Nair, head (research) at Geojit Financial Services.

“However, any deviation from market expectation may lead to short-term correction in the respective segments,” Nair said. Markets will also track the movement of the rupee, foreign institutional investors and brent crude.

Policy makers at the International Monetary Fund and World Bank annual meetings have warned of supply chain woes and growing inflation concerns.

Foreign portfolio investors (FPI), meanwhile, have turned net sellers in the capital markets in October so far, reversing the trend of net investments in the previous two months because of the depreciation in the rupee and global factors.  According to the depositories’ data, FPIs have pulled out Rs 1,472 crore from capital markets on a net basis in the current month so far.

However Ajay Kejriwal, president at Choice Broking, said he expected a kneejerk reaction on inflation but overall it will be considered as positive by investors.

Telecom show

The second quarter of the fiscal is likely to be a “healthy quarter” for telecom companies, where Jio’s performance will be driven by subscriber additions, and Bharti and

Vodafone Idea will benefit from tariff hikes and some recovery post-severe wave of Covid-19, according to some analysts. 

The urgency around tariff hikes has come down with Vodafone Idea Ltd’s near-term cash outflow significantly reduced, IIFL Securities said.