Q4 earnings, US GDP data & FII flows among 6 key drivers for Dalal Street this week

The BSE Sensex index ended 847 points or 1.40% lower at 59,538, while Nifty50 fell 204 points or 1.14% at 18,828 last week.

“The Q4 results season, so far, has been a mixed bag with IT disappointing and banking giving early indications of continuing strength. Broadly, this trend is likely to sustain. But there can be occasional pull backs in IT from the sharp correction after the Infosys results. A strong and sustainable rebound in IT is difficult, given the weak global cues,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

Vinod Nair, Head of Research at Geojit Financial Services, said “Weak signals of a softening job market and declining manufacturing activity in the US have raised fears of a possible recession. Despite the RBI’s MPC unanimously deciding to pause rates, the members still hold concerns about high inflation, as revealed in the minutes.”

Now, the market’s focus will shift to the banking sector, with major banks set to release their earnings next week, Nair added.

The coming week will be a busy one for Dalal Street as several companies, including Nestle, Bajaj Finance, and Axis Bank, will release their quarterly numbers.

Q4 Earnings
Quarterly earnings will be on the top of investors’ radar, as they will react to RIL and ICICI Bank Q4 results.In the coming week, IndusInd Bank, Nestle, Bajaj Auto, Tata Consumer Products, Bajaj Finance, Maruti Suzuki, HUL, Axis Bank, Bajaj Finserv, Wipro, Tech Mahindra, UltraTech Cement, SBI Cards and Kotak Mahindra Bank will be detailing their earnings.

FII Flows
FPIs turned buyers in April with net buy of stocks worth Rs 6948 crores till 21st April.

“During the fortnight ending 15th April FPIs heavily bought financial stocks for Rs 4410 crores. They were also buyers in automobiles and capital goods. FPI inflows are likely to remain stable, going forward. Financials will continue to attract more inflows since the early Q4 results of the segment are very good,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

RIL Earnings
Reliance Industries Ltd gave a sweet surprise to Dalal Street by reporting a sharp 19% year-on-year (YoY) rise in consolidated net profit for the quarter ended March to Rs 19,299 crore. This is way higher than the 4% growth projected widely by analysts. On Monday’s trade stock reaction can be seen on the back of the Q4 results.

Global Cues
The US will release the GDP growth rate QoQ numbers for March the March month. Investors will watch initial jobless claims data for March in the US to make an analysis of further interest hikes. Bank of Japan will also take interest rate decisions.

Corporate Action
The board of Goyal Aluminiums, JostS Engineering Company, Salasar Exteriors & Contouring Sera Investments & Finance India will consider and approve a stock split this week. Nettlinx, Achyut Healthcare, and Sprayking Agro Equipment will consider the bonus share issue.

Vesuvius India, ABB India, HCL Technologies, Jindal Stainless, KSB, and Sanofi India are the other companies that will consider dividend payments.

Technical Charts
After clocking three consecutive weekly gains, benchmark indices took a breather. The Nifty 50 has net lost over 1% last week largely due to profit booking after the over 5% gains.

Technically, the index is in a consolidation phase, and analysts see this continuing in the week ahead.

“As far as levels are concerned, till Nifty firmly withholds the pivotal support of 17500, there is no sign of caution in the market,” said Osho Krishan, senior analyst – technical and derivatives, Angel One.

On the higher end, 17700-17800 holds as stiff resistance zones and a decisive move beyond these levels could trigger the next leg of a rally in the market.

Krishnan expects strong moves in the broader market with the ongoing earning season, and therefore, recommends a stock-centric approach for better trading opportunities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)