Volatility is the name of the game in India’s stock markets as investors and traders, confused by conflicting calls on everything from an industrial recovery to a US economic shutdown, are looking for direction. New clues on where stocks will go are expected to emerge this week as key companies declare their second-quarter results.
In anticipation, last week saw the benchmark Sensex yo-yo 872 points, as expectations linked to a US fiscal crisis rocked the market. Markets may turn sober as factory output data late on Friday ahead of the Dusshera weekend showed a slackness that belied anticipation of green shoots.
“The markets would remain volatile reacting to news flows and quarterly performance of companies,” says Pankaj Pandey, head of research at ICICI Securities.
Investors will be looking out for clues on the WPI (wholesale price index) and CPI (consumer price index) data for the month of September expected on Monday, in addition to corporate results. Reliance Industries Ltd (RIL), Tata Consultancy Services, Bajaj Auto, Larsen & Toubro and HDFC Bank are among companies that would declare their results this week.
“Generally, IT and pharma companies are expected to do well,” said VK Vijayakumar, investment strategist at Geojit BNP Paribas Financial Services. He expects fast moving consumer goods to post “reasonable” numbers and public sector banks, real estate and cement to disappoint.
Pandey said both oil-led conglomerate RIL and software leader TCS, reporting their results on Tuesday were expected to have positive news.
Construction leader L&T is looking strong, having reported new orders worth `24,500 crore in the latest quarter, while Bajaj Auto is expected to have gained from the rupee’s weakness as 40% of its revenues come from exports.
Pandey said he expects HDFC Bank to be under pressure as slower growth and margin pressures hurt. Overall, the July-September quarter would show better numbers than the previous quarter, he said.