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COVID-related situation, Q4 earnings and RBI policy outcome key triggers for market in coming week

In the coming week, all eyes will be on RBI's MPC outcome. While the rates and stance may be stable, investors will closely observe the central bank's commentary on growth and inflation.

April 04, 2021 / 12:45 PM IST

The week gone by, which was a truncated one, ended well for the market with the Sensex logging a gain of 2.08 percent and the Nifty50 gaining 2.4 percent for the week.

The BSE Midcap index climbed 2.7 percent while the BSE Smallcap index rose 4 percent for the week ended April 1.

In the coming week, all eyes will be on RBI's MPC outcome. While the rates and stance may be stable, investors will closely observe the central bank's commentary on growth and inflation.

Besides, the sentiment will shift to corporate earnings. The fourth-quarter earnings season will begin in the coming days which will infuse stock and sector-specific volatility.

Here are the views of 5 analysts on what to expect this week:

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Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities

The record GST collection in March (Rs 1.23 lakh crore) points to the sustained economic recovery even though the number of COVID-19 cases is rising.

After the fiscal year-end, investors are back into the market with more action seen in the mid and small-cap space.

Nifty50 has once again bounced above the 50-day moving average (DMA), which is a good sign. There is a golden crossover in the Nifty Mid Cap 100 index wherein the 50-week moving average (WMA) has gone above the 200 WMA which signals a long-term bullish trend.

Going forward, the RBI policy and earnings season could be the next trigger for the market. The start of FY22 has been very good and April month could likely see more action with the start of the earnings season.

Ajit Mishra, VP Research, Religare Broking

In the coming week, markets are likely to take cues from global peers. We believe positive bias could continue as global markets have witnessed renewed buying interest on the back of the stimulus package announced in the US.

Also, domestic investors’ mood remains buoyant in hopes for a strong corporate earnings outcome. Meanwhile, rising bond yields and Covid-related updates will be key monitorable.

The upcoming Q4FY21 earnings season will begin in a week’s time, so investors’ focus will be shifting back to fundamentals.

This time investors’ expectations are rife for a strong earnings season led by healthy demand recovery and low-base effect.

On the earnings front, revenue growth, margins expansion and management commentary will be key things to watch out for.

Nirali Shah, Head - Equity Research, Samco Securities

Nifty closed in the positive for the week gone by, however, the market is lacking decisiveness in its direction as the index, after bouncing from its channel support, is still contained within last Tuesday's trading range and the just-concluded week's candle is also within the previous week's range.

Our market is actually witnessing a volatility squeeze while the trend in other emerging indices hints at a consolidation breakout on the upside. We suggest traders maintain a mildly bullish outlook. Immediate support and resistance are now placed at 14,260 and 14,880.

A noteworthy event to look forward to in the coming week would be the central banks’ MPC meet. It is expected that the RBI will continue with its accommodative stance on the back of uncertainty around the intensity of the second wave.

Special attention should be given to the governor’s comments on the overall economic state.

The Q4 result season is also expected to commence next week. The fiscal year 2020-21 taught us a great lesson of staying invested through the thick and thins of the market and we advise investors to keep a 5-7 years’ investment horizon to beat the volatility that the coming year will bring us.

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services

Going ahead, Indian markets are likely to track global cues after the recent announcement of the infra investment plan by the US president.

Further, investors would now focus on the quarterly results which would kick start from mid-April. Domestically, concerns over the fast-spreading second wave of COVID-19 in India continue to remain and the fear of possible lockdowns prevails.

The overall market is likely to remain in a consolidative mode for some time waiting for fresh positive triggers.

Next week, investors would react to the OPEC meeting outcome which met on April 1, amid concerns about extended lockdowns in Europe and volatile oil prices throughout March.

The market would also keep an eye on PMI data of US, China and Europe. In the given scenario, investors would do well by gradually accumulating good quality companies on any declines in the market.

Hemant Kanawala, Head – Equity, Kotak Mahindra Life Insurance Company

COVID cases in India continue to rise and Maharashtra remains the epicenter accounting for about 60 percent of the cases in the country.

However, so far the rise in cases and localized restrictions has not led to any major disruption in economic activity.

Globally, vaccination drive has been strong in the UK and the USA and hence these economies are expected to normalise sooner than others.

Hence, investors' focus should be on export-oriented industries like IT, pharma, specialty chemicals and auto ancillaries.

As we are entering the earnings season, investors' focus will shift to corporate commentary along with the results to get guidance for the future outlook.

The Nifty is trading at a P/B of 4.2, which is close to the post-GFC (global financial crisis) high. The second wave of COVID-19 and high valuation are expected to maintain volatility in the markets in the near term.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Nishant Kumar
first published: Apr 4, 2021 12:45 pm

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