Q4 earnings among key factors that will drive stock market this week

As earnings season gathers pace, D-Street will be eyeing quarterly results to gauge the future trajectory of Mr. Market. BFSI as well as IT companies will be in the limelight as market players decode results and management commentary of a slew of companies in these sectors.

“With the start of the earnings season, the domestic market is also likely to be buoyed by sector-specific momentum in the coming days,” said Vinod Nair, Head of Research at Geojit Financial Services.

Key factors that will drive market this week:


Q4 earnings
As the earning season heats up, we may see some heavy movement in individual stocks this week. Among the key earnings this week are Mindtree, ACC, L&T Infotech, Tata Steel Long Products, ICICI Securities, Tata Elxsi, HCL Tech, ICICI General Insurance, Nestle India, Tata Communication and Rallis India.

Covid cases
India is again seeing slight increase in Covid-19 cases, especially in some cities like Delhi. Positivity rate has also jumped. Though it is still not concerning but seen in context of what is happening in China, investors may still keep a track of the health ministry data and any significant rise will impact markets.

Inflation
Inflation continues to be a concern and if it sustains will eventually result in interest rate hike by RBI. Traders will keep an eye on food prices and fuel price hikes during the week. Any further rise in them will be negative for the market.

LIC IPO
There is a very good chance that the government may announce the initial public offer of Life Insurance Corporation (LIC) during the week as it plans to list it before May 12, when the Sebi approval lapses. If it happens, we may see investors gearing up for it and it may even result in some selling in the market.

Tech outlook
Nifty50 closed the week on a negative note, taking cues from global indices and has closed just around its immediate support level of 17,450. On the weekly chart, the index has formed an evening star candlestick pattern, indicating bearishness. After the highs of October 2021, a lower top lower bottom pattern has been forming on the benchmark index.

“The broader indices also have a similar trend and the overall structure of the market has been shifting to the bearish side. A decisive fall below 17,450 levels can lead to a retest of 16,900 zone. Thus, traders should maintain a mild bearish outlook going into the next week. A move above the immediate resistance level of 17,850 can negate the bearish outlook,” said Yesha Shah, Head of Equity Research, Samco Securities.