Additionally, possible easing of tensions between the US and China are likely to keep investors on their feet
Earnings are likely to be the big focus point for the market in this week along with a few macro data points globally. Additionally, possible easing of tensions between the US and China are likely to keep investors busy.
Stable global cues along with rise in IT and consumption names helped the bulls put up a tough fight. The market was largely trading around the flat line with bouts of negative moves. The last couple of hours witnessed erasing of losses.
For the week, both the Sensex and Nifty ended 1 percent higher.
"Next week is expected to be full of action with the major names in India Inc reporting their Q3FY19 earnings, few of them namely HDFC Bank, Kotak Bank, Maruti, L&T, Yes Bank, Asian Paints, Indigo, TVS Motor, ITC, Ultratech Cement and United Spirits. Trading woes will be dictated by the upcoming interim budget with investors preparing to reshuffle their portfolio according to their expectations. Global market events such as China's Q4 GDP growth data, Japan's balance of trade data and the US existing home sales data for the month of December 2018 will also be closely watched," Rahul Sharma, Senior Research Analyst at Equity99 said in a statement.
Here is a gist of ten things that will keep traders on their feet:
HDFC Bank, Wipro reactions
This week will see investors reacting to the earnings of HDFC Bank and Wipro. Both the companies declared their December quarter results after market hours on Friday.
Wipro reported IT services revenue of Rs 14,665.6 crore for the December quarter, a rise of 2 percent compared to revenue of Rs 14,377.3 crore posted during the previous quarter.
The company reported a net profit of Rs 2,544 crore against the previous quarter's Rs 1,885 crore.
The earnings before interest and taxes was reported to be at Rs 2,909.4 crore, a jump of 12.5 percent quarter on quarter from Rs 2,586.3 crore.
The IT services EBIT margin rose to 19.8 percent from 18 percent posted during the previous quarter.
Meanwhile, private sector lender HDFC Bank posted a 20.3 percent year-on-year (YoY) growth in its December quarter (Q3) net profit at Rs 5,585.85 crore on strong growth in its net interest income (NII). The bank met the analyst estimates even as provisions rose considerably in the third quarter.
The bank had posted a profit after tax of Rs 4,642.60 crore in the same period last fiscal.
The net interest income (difference between interest earned and expended) rose to Rs 12,576.75 crore up 21.9 percent YoY. In the year ago, the bank had posted NII of Rs 10,314.3 crore. The core net interest margin for Q3FY19 stood at 4.3 percent.
Around 205 BSE companies will be declaring their earnings for December quarter. Apart from marquee names, investors will watch out for earnings from HDFC AMC, Hindustan Zinc, Union Bank of India, Alembic Pharma, Havells India, ICICI Prudential Life, Can Fin Homes, InterGlobe Aviation, United Spirits, Biocon, Reliance Power, PVR and Dewan Housing, among others.
Big names to declare Q3The Street will watch out for key earnings such as Kotak Mahindra Bank, Asian Paints, UltraTech Cement, Yes Bank, L&T and Maruti Suzuki.
Kotak Mahindra Bank: Motilal Oswal expects standalone loan growth at 23 percent and deposit growth to be around 21 percent. The earnings could grow 19 percent year on year, while the asset quality could be stable, analysts at the firm wrote in their report.
Asian Paints: Motilal Oswal expects subdued performance from the company, with a likely contraction in margins. The revenue could grow by 13 percent, it added.
Yes Bank: The brokerage house expects loan growth to remain significantly ahead of the system at 42 percent, while deposit growth is likely to be healthy around 38 percent year on year. Investors must need to watch out for succession plan to Rana Kapoor as well as asset quality.
Larsen & Toubro: The net profit could grow 19 percent YoY on the back of better order book and higher other income. It expects revenue growth of 12 percent.
Maruti Suzuki: Motilal Oswal expects a sombre performance by Maruti during the current quarter. The PAT could see 6 percent decline, dragged by lower volumes and margin contraction.
Apart from Board meetings to declare results, investors will watch out for special meetings to dividend issue. Some of the names include Mindtree, Trident, Infosys, and KPIT Technologies.
The Board of NHPC will be meeting to discuss a fundraising plan. Foseco India could be in focus as the company will be discussing a voluntary delisting process.
The Nifty formed a bullish candle for the second consecutive week in a row.
It bounced back after hitting its 5-days exponential moving average (EMA) to close above 10,900 levels.
Analysts at HDFC Securities believe that the near term trend for Nifty could be rangebound. It is showing lack of strength after an upside breakout of triangle is not a good sign for bulls. A decisive/sustainable move only above 10,950 levels could open up more upside in the market for next week
“A higher levels weakness or a slide below the key lower support of 10,850 could bring bears back into action. The inherent structure of long term charts is indicating limited upside potential for the market for near to long term,” they wrote in their report.
Traders will keep an eye on the movement in Indian rupee as well. The currency managed to touch 71 per US dollar threshold again.
The currency has shown some recovery from the recent lows, but mildly higher crude trajectory is likely to keep an upside on the appreciation.
Investors in the Indian market could make a note of movements in Brent Crude prices. The commodity has crossed USD 61 per barrel, but is still off its high points from the past one year.
With possible easing of tensions between China and US, prices have resumed an upward move. Having said that, the global slowdown fears are also likely to weigh on crude prices.
The Street will keep a watch on global cues such as the White House shutdown as well as possible easing of tensions between the US and China. Both countries have been at loggerheads and imposed import tariffs. But that has dented economic progress of both the nations, thereby spooking markets around the world.
On the global front, China will announce its Q4 GDP. Additionally, US will declare its home sales data, while Japan will be announcing Balance of Trade data.
Back home, there are no major macro cues except for forex reserves data.
Stocks in News
NTPC: The company will consider a bonus issue on January 30, 2019.
Ashirwad Steels: It has approved re-appointment of Dalbir Chhibbar as MD
Mahindra Rural Housing Finance: Board approved issue of NCDs worth Rs 6,000 crore on private placement basis.
IDFC First Bank: RBI approved appointment of V Vaidyanathan as MD & CEO for 3 years.
L&T: SEBI has asked the company to not proceed with buyback offer due to likely adverse debt-equity ratio,South Indian Bank: Q3 net profit falls 27 percent at Rs 84 crore; asset quality deteriorates.