The key Indian equity indices — the BSE Sensex and the NSE Nifty50 — are expected to take cues from quarterly results, along with macro-economic data points and the flow of foreign funds during the upcoming week.
“The focus will continue to be on results this month. Sectors like PSU banks, infra and pharma will be in focus,” Arpit Jain, AVP at Arihant Capital Markets, said.
Some of the major companies that will announce their July-September quarter earnings during the upcoming week include Bharat Heavy Electricals, Cipla, Ashok Leyland, Bharat Forge, Aurobindo Pharma, Jindal Steel and Power, Steel Authority of India, Tata Motors, Mahindra and Mahindra, State Bank of India, Coal India and Larsen and Toubro.
“On the macro front, automobile sales data for October by SIAM (Society of Indian Automobile Manufactures) will be announced on November 8-10, and the Index of Industrial Production for September will be announced on November 10,” Jain added.
According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the Indian markets, which scaled a fresh peak on the first trading day of November, are all set to hit fresh highs in the next 12 months.
“Earnings recovery will prove to be the ‘make or break’ level for the Indian market. If earnings fail to play catch-up, then the Indian markets will start looking expensive and we could see some course correction,” Desai said.
“The rally getting bigger highlights the inherent strength in the trend amid persistent demand at elevated levels and augurs well for the continuance of the up-move going forward,” Desai said.
Vinod Nair, Head of Research, Geojit Financial Services, said: “FIIs (foreign institutional investors) have turned net buyers since the government announcement on ‘Bharatmala’ and (bank) recapitalisation, which is a positive sign. The concerns of premium domestic valuations have faded and investors are looking towards visible long-term growth opportunities in sector/stocks.”
Figures from the National Securities Depository Ltd (NSDL) revealed that foreign portfolio investors (FPIs) invested in equities worth Rs 2,773.08 crore, or $179.57 million, during October 30-November 3.
Provisional figures from the stock exchanges showed that FIIs turned net buyers on November 1-2 and invested in stocks worth Rs 2,071.19 crore.
“However, in the near term, the market will continue to gauge ongoing Q2 results. However, any reasonable relief in tax rates of goods under 28 per cent bracket in the upcoming GST council meet next week will support the current positive momentum,” Nair added.
The GST Council will hold its 23rd meeting in Guwahati on November 10.
Commenting on technical levels, Deepak Jasani, Head, Retail Research, HDFC Securities, said: “Technically, with the Nifty surging higher to new life highs, the underlying trend remains up. Further upsides are likely once the immediate resistance of 10,471 is taken out.”
“Weakness could emerge next week if the support of 10,311 is broken,” Jasani said.
Bolstered by an upbeat domestic macro data and global cues, the benchmark indices — BSE Sensex and NSE Nifty50 — rode the bulls to scale new highs last week.
On Friday, the broader Nifty50 of the National Stock Exchange (NSE) hit a new 52-week high of 10,461.70 points intra-day, and closed trading at record 10,452.50 points. On a weekly basis, it edged higher by 129.45 points, or 1.25 per cent.
The barometer 30-scrip Sensitive Index (Sensex) of the BSE, too, saw a strong closing at 33,685.56 points — up 528.34 points, or 1.59 per cent, on a weekly basis. The Sensex hit a new 52-week high of 33,733.71 points on intra-day basis.