Earnings, global cues likely to keep market range bound in short term: Experts
The quarterly results of the companies will occupy the centre stage, while D-street will keenly hear the management commentary about future earnings growth trajectory. Investors should practise caution and use wisdom with an eye on the significant events that are on the cards
The Indian markets ended a highly volatile week on a negative note amid mixed domestic as well as international cues on Friday. Indices witnessed selling amid mixed economic data from the US and India, selling by foreign institutional investors and geopolitical tensions. For the week ended October 14, the BSE Sensex shed 271.32 points or 0.46 percent to close at 57,919.97, while the Nifty50 fell 128.95 points or 0.74 percent to end at 17,185.7 levels.
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Ajit Mishra, VP - Research, Religare Broking | In absence of any major event, earnings and global cues will dictate the trend next week. First, participants will react to the HDFC Bank numbers in early trade on Monday. Markets have been consolidating in a range i.e. 16,800-17,400 for the last two weeks and we expect this consolidation to end soon. Though we still see buying interest in select stocks across sectors, especially banking, a decisive close above 17,400 would help in regaining momentum and strengthening the bulls. On the flip side, a breakdown below the lower band of the range i.e. 16,800 could derail the recovery. Amid all, volatility will remain high due to scheduled earnings and erratic swings in the global markets. Participants should align their positions accordingly and we suggest focusing more on risk management.
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Santosh Meena, Head of Research, Swastika Investmart | The market will look for direction from Q2 earnings and global cues. Earnings season kicked off with IT earnings. Many financial and cement companies will come out with their Q2 results this week. Global markets are quite volatile, which may lead to volatility in our market as well. In terms of global factors, macro numbers from the US and China will be important. The movement of US bond yields, the dollar index, and crude oil will be other global factors to watch out for. FIIs are aggressively selling in the cash market, but DIIs are providing good support to the market. Technically, the Nifty is in a tight range where the cluster of 100-DMA (16,835) and 200-DMA (16,990) is acting as a support zone while the cluster of 20-DMA (17,240) and 50-DMA (17,490) is acting as a supply zone. On a weekly time frame, the 20-week SMA is proving to be strong support for the Nifty. Any decisive move from the 16,800-17,500 band, will dictate the further direction of the market.
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Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The overall structure shows that the index is still in the short-term consolidation phase. In terms of price patterns, it can form a triangular pattern on the daily chart. This implies that the range-bound action can continue in the short term. The index can revisit 17,050 on the downside. On the other hand, the near term resistance is at 17,350.
Apurva Sheth, Head of Market Perspectives, Samco Securities | The United States Industrial Production output will have an impact on markets throughout the world. In August, this number fell 0.2% despite expectations of an increase. Will be closely watched to see if the Factory activity has increased or decreased even more. The Chinese economy has drastically slowed down; in Q2FY22, it shrank by 2.6%. Investors would be better able to predict the direction of the Chinese economy with the release of the Q3FY22 GDP figures. Back home, the quarterly results of the companies will occupy the centre stage. D-street will be interested to hear the management commentary about future earnings growth trajectory. Investors are encouraged to choose their investments with caution and wisdom in light of the several significant events that will soon take place.
