Q4 results, geo-political tensions to guide equity markets this week

Investors are cautious as lower revenue guidance from Infosys on April 13 had stoked concerns

The ongoing fourth quarter (Q4) results' season, along with global geo-political tensions are expected to guide the movement of the Indian equities markets during the upcoming trade week.

"Upcoming fourth quarter earnings results and development in global geo-political tensions are expected to determine the trend of the market," D K Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, told IANS.

Companies like the IndusInd Bank, YES Bank, Hindustan Zinc, MindTree, ACC and HDFC Bank are expected to announce their quarterly results in the coming trade week.

However, investors are expected to be cautious as lower revenue guidance from IT major Infosys on April 13 had stoked concerns over the rest of Q4 results' expectations.

"Poor earnings vis-a-vis expectations will put a question mark on whether the current valuations were based on fundamentals or liquidity," Devendra Nevgi, Chief Executive of Zyfin Advisors, told IANS.

Apart from the Q4 results, investors will also be looking forward to the upcoming macroeconomic data point of Wholesale Price Index (WPI).

The data assumes significance as it follows macro-economic data points — Index of Industrial Production (IIP) and Consumer Price Index (CPI) — which showed that industrial production contracted in February and consumer price inflation edged up in March.

Besides, the price movement of Indian rupee against the US dollar and crude oil prices will be the crucial factors for market sentiments next week, Aggarwal pointed out.

The rupee's price movement will be in focus as US President Donald Trump has called for weakening the dollar.

Last week, the rupee weakened by 12 paise for the week ended April 13, 2017, to 64.41-42 against a US dollar from last week's close of 64.29.

On technical levels, Deepak Jasani, Head — Retail Research, HDFC Securities, explained: "With the Nifty breaking the recent lows of 9,162 points, the bears seem to have an upper hand."

"Further downsides are likely once the next support of 9,145 points are broken. Our downside targets in this scenario are at 9,095-9,024 points."

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, investors will closely watch the movement of FII (foreign institutional investor) flows.

The provisional figures from stock exchanges for last week showed an outflow of foreign funds worth Rs 2,967.75 crore, while domestic institutional investors (DIIs) bought scrips worth Rs 1,794.9 crore.

Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) off-loaded equities worth Rs 2,178.58 crore, or $338.09 million, between April 10 and 13.

Last week, the Indian equities markets were dragged lower by rising geo-political tensions, along with disappointing macroeconomic data points.

However, short covering at lower levels restricted the downside.

Consequently, the trade week that ended on April 13, 2017, saw the barometer 30-scrip Sensitive Index (Sensex) of the BSE, recede by 245.16 points or 0.82 per cent to 29,461.45 points, while the wider 51-scrip NSE Nifty closed at 9,150.80 points -- down 47.50 points or 0.51 per cent.