Q4 Earnings Season, Rupee-Dollar Movements, Foreign Trading Activity To Drive Markets Ahead: Analysts

The trading activity of foreign investors, global economic trends, and the last batch of fourth-quarter earnings would influence the equity markets in the week ahead, analysts noted. The experts pointed out that the ongoing election season could lead to volatility amongst investors.

The week ahead will remain shortened as the market will observe a holiday on Monday owing to the fifth phase of the Lok Sabha elections in Mumbai, reported PTI. Elaborating on the outlook, Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, noted, “We are at the end of Q4 earnings. Positive earnings reports could provide some relief in this uncertain market.”

Further, on the global end, investors will keenly await the speech from Jerome Powell, Chair, US Federal Reserve, scheduled for Monday. Other macroeconomic releases from Japan and the US, and fluctuations in global currencies will also influence the market ahead, Gour added.

Arvinder Singh Nanda, Senior VP, Master Capital Services Ltd, said, “ONGC, SAIL, BHEL, JK Tyre, One97 Communications, Power Grid, InterGlobe Aviation, ITC, and NTPC will announce their quarterly earnings this week. The outlook for the market will be guided by the major domestic and global economic data, such as India's PMI manufacturing and service data, UK inflation data, US initial jobless claims, S&P global services data, and S&P global manufacturing PMI and Q4 corporate results.”

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, pointed out that investors will keenly observe the rupee-dollar trend and movements in the global oil benchmark, Brent crude. “While volatility could increase over the next couple of weeks, selective buying in key frontline, mid and smallcap stocks will persist,” Tapse added.

Notably, the key equity benchmark indices, Sensex and Nifty, rallied ahead last week. The BSE Sensex soared 1,341.47 points or 1.84 per cent, while the NSE Nifty50 climbed 446.8 points or 2 per cent. 

“Amidst ongoing uncertainties surrounding election results and quarterly earnings, we anticipate continued volatility in the near term,” stated Vinod Nair, Head of Research, Geojit Financial Services.

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