The week ahead is likely to be a busy one, with the earnings season getting underway. Geopolitical tensions on the Syrian front will also play a part.
Positive momentum in the market continued for the seventh consecutive session on Friday, helping benchmark indices post a healthy performance for the third week in a row.
The market shrugged off Syrian tensions that lifted crude oil prices to around four-year highs. Fall in March CPI inflation and better February industrial output growth boosted sentiment, but profit booking in the banking space and caution ahead of Infosys' earnings (due post market hours on Friday) caused volatility in the later part of the session.
For the week, the Sensex gained 1.7 percent and the Nifty rose 1.4 percent, while IT was the biggest gainer among sectoral indices, rising more than 5.5 percent.
Global markets were mixed this week amid geopolitical tensions over Syria and trade war concerns.
The next week is likely to be a busy one, with the earnings season getting underway, and geopolitical tensions on the Syrian front taking center stage.
"Global clues, earnings and macroeconomic data to dictate market trend in the coming week. Apart from on-going geopoltical concerns and on-going earnings seasons, markets will now keep an eye on upcoming Karnataka State elections. Any new developments on that front will affect market swings," Gaurav Jain, Director, Hem Securities said in a statement.
Meanwhile, experts also see cues from the earnings front.
"March quarter earnings are expected to provide further support to the market going ahead...Major companies which will announce Jan-Mar quarter earnings this week include CRISIL, Muthoot Capital, Tata Sponge, ACC, HDFC Life, Mindtree, IndusInd Bank, TCS, CDSL, HDFC Bank," Anita Gandhi, Wholetime Director, Arihant Capital Markets said in a statement.
Syria attack to keep market volatile
US, British and French forces launched air strikes on Syria on Saturday morning, in response to a suspected poison gas attack that killed dozens of people.
The aim was to degrade its chemical weapon capabilities in what was the biggest intervention yet in the conflict by Western powers, according to a Reuters report.
The equity market does not like uncertainty and with a war-like situation, things could get really volatile for markets, not just in India but across the globe.
Indian markets are trading above key support levels and although a knee-jerk reaction cannot be ruled out, it would not be strong enough to derail the trend.
Nifty has not shown any correlation to such events in past. Syria is a relatively smaller country to be worried about and its impact should be minimal-to-negligible for Indian markets.
"Syrian attack on markets would be minimal. The stock markets are valued with its future cash flows discounted to present value and unless the cash flows are dependent on such geographies, the impact on the stock market will not be significant," Shubham Agarwal, CEO & Head of Research at Quantsapp Private Limited told Moneycontrol.
"Syria is a crude oil exporter but its 34th on the rank for crude export and is not material enough to alter the crude oil price for any inter-correlation impact of the stock market with commodities," he said.
35 companies to declare their earnings
As the earnings season kicked off with the likes of Infosys declaring their results on Friday, the Street will wait for cues from many such companies. Over 30 companies are lined up to declare their March quarter and annual results next week.
These include DCB Bank, Gruh Finance, Jay Bharat Maruti, Orchid Pharma, ACC, Cyient, Sasken and Indiabulls Housing Finance, among others.
The quarter gone by is significant for the market as a recovery is being anticipated by experts, which is expected to shore up the Street going forward.
Infosys to react
Infosys declared its numbers for the March quarter on Friday and the Street will most definitely react to the developments.
The company's results were largely in-line with market expectations. India’s second-largest software services exporter reported a net profit of Rs 3,690 crore, which was in-line with a CNBC-TV18 poll of Rs 3,670 crore.
The stock closed 0.5 percent higher at Rs 1,169. It hit a low of Rs 1,150 and a high of Rs 1,185.90 during the session.
Brokerages are slightly cautious on the stock after its earnings announcement, and in some cases, there has been a cut in earnings estimates.
While Motilal Oswal has maintained a buy rating on Infosys, Dolat Capital has retained its sell rating on the stock as well. Prabhudas Lilladher, meanwhile, highlighted how lack of acceleration in core verticals is a concern.
TCS, HDFC Bank, IndusInd Bank to declare results
Some of the marquee names will also be announcing their results in the upcoming week. Heavyweights such as ACC, HDFC Bank, Tata Consultancy Services, IndusInd Bank, and HDFC Standard Life, among others, will declare their results.
Being index heavyweights, the Street will keep a close eye on their earnings trajectories.
Stocks in the news
ICICI Bank: BSE has sought a clarification from the bank on a probe by SEBI with regard to corporate governance issues.
Bharti Airtel: Delhi High Court has directed the company to modify its tagline of ‘Live and Free’ advertisements for the IPL.
Alok Industries: Lenders have reportedly agreed to a revised resolution plan.
United Spirits: The company's board has approved a stock split in the ratio of 5:1.
Reliance Industries: The company has raised Rs 3,250 crore from Japanese banks to fund capex plan.
Tata Group: Tata Projects won Mumbai Metro orders worth Rs 1,048 crore.
Metal stocks: The White House will reportedly decide on a rollback of tariff on Indian steel, aluminium.
Rane Brakes: The company reported a net profit of Rs 5.91 crore for the quarter ended March, compared with Rs 4.39 crore in the corresponding period a year ago.
ICICI Bank in focus
ICICI Bank continues to be on investors’ radar with new developments every day. Most recently, the Securities and Exchange Board of India (SEBI) is said to have initiated an inquiry into the corporate governance issues at the bank.
BSE too has asked for an explanation about the same from the lender. It remains to be seen how the lender reacts going forward.
Meanwhile, following Axis Bank chief Shikha Sharma’s cut in term duration, pressure is seen mounting on ICICI Bank’s board to decide on MD and CEO Chanda Kochhar's future at the bank.
Apart from companies meeting for financial results’ declarations, stocks such as Philips Carbon Black will be in focus on the back of a stock split.
The ex-date for the split is April 19, with a face value split from Rs 10 per share to Rs 2 apiece.
Apart from developments from Syria, the market could keep an eye on key macro economic data from various nations.
For instance, Japan and the US will be releasing industrial production data, while the Chinese GDP numbers will also be declared next week.
Additionally, members of Federal Open Market Committee (FOMC) will be speaking on three occasions, which could give a few more cues to the Street.
Back home, while the market is looking to digest IIP and inflation trends, there will be a few more sets of data released. Wholesale price index (WPI) inflation for food, fuel, and manufacturing will be released on Monday.
The Nifty made a ‘Doji’ type of candlestick pattern on the daily candlestick charts and a bullish candle on the weekly charts.
The index has managed to climb all walls of worry this past week and as long as the 10,350 level remains intact, traders are advised to stay with long positions.
The next possible target on the Nifty is placed above 10,600 levels, experts suggested.
A 'Doji' is formed when the index opens and then closes approximately around the same level but remains volatile throughout the day, which is indicated by its long shadow on either side. It appears like a cross or a plus sign."The near term trend of Nifty continues to be positive and the next upside levels to be watched for coming week is 10,630 levels. The intermediate trend of Nifty is still down, the upside bounce of the last three weeks has not changed the broader negative status of the market. Creating trading long positions for small duration, profit booking at regular intervals, and a placing of strict stoploss could be a prudent trading strategy for next week," HDFC Securities said in a report.