Earnings may not be key plank for market

CNBC-TV18’s Executive Editor, Udayan Mukherjee – Two things in earnings might actually determine a big influence on the market, one is the Infosys guidance, the sector might have lost its mantle of leadership over the last couple of years but this time, IT has supported the market. It still holds quite a bit of weightage in index and IT stocks have all pulled back. So, we are going into strong Infosys guidance, at least till this week and it’s a bit of a make or break.

We don’t know what Infosys will say, if its ultra conservative and shocks the market a little bit and then you might open up another leg of downside. Conversely, if it actually gives you good news, you could see IT continue its out performance and you never know what lifts sentiments, so it is certainly very important for sentiments this time around. My guess is that one pivotal event, start of next week, is probably an important inflection point for the earnings season.
 
The other is what kind of disclosures comes in from the derivatives side. If the feeling is and there is a debate which is going on that subject that they don’t need to disclose in the current quarter and probably need to do it when their annual statements come out, maybe 2-3 months down the line, then you might be spared the blushes in this current quarter. So those two are important otherwise I don’t think there is any spectacular surprise which looks unlikely, or any major core earnings disappointment which also doesn’t look very likely.

I don’t think earnings will be the key plank around which the market moves. They are always important but is it the central trigger which will determine where the market goes from here. I doubt that very much, with those two exceptions. Any major disclosures can lead the market down, some surprises on Infosys could swing the market either way, but the rest of the earnings will come and go and the market will probably not hinge around it.