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Q2 results, fund flows to dictate equity market movements (Market Outlook)

IANS  |  Mumbai 

The second-quarter earnings result season, along with the direction of foreign fund flows and macro-economic data points, are expected to determine the trajectory of key Indian equity indices week.

Market analysts said that coupled with rupee's strength against the US dollar will also influence the market moves.

"The markets week would get some sentimental support from stability in INR and crude oil prices," Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.

"The earnings season would be closely tracked as a factor to mitigate some of the volatility in the markets."

Companies like ACC, Cyient, Reliance Industries, Infosys, Hero MotoCorp, and are expected to announce their Q2 earning results week.

"Currently, broader markets look attractive while investors may seek more clarity from upcoming quarterly results," said Vinod Nair, at

"The continuity of this trend largely depends on stability on bond yields and INR. However, worries about rate hike, US-trade dispute and political uncertainties in on account of upcoming state elections may impact the sentiment in the short-term."

Apart from the Q2 results, investors will look forward to the macro-economic data points of WPI (Wholesale Price Index) and India's trade figures.

The (CSO) is slated to release the macro-economic data points of WPI on October 15.

"The trade deficit number due next week would be crucial for the INR moves," Nevgi said.

On a weekly basis, the rupee closed at 73.56 last Friday, strengthening by 21 paise from its previous week's close of 73.77 per greenback.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 8,335.12 crore last week.

At present, outflows in just the nine trading sessions in October have reached over Rs 17,000 crore.

This has been one of the worst months in over a decade in terms of fund outflows.

On technical charts, (NSE) Nifty50 remains in an uptrend as it has closed at new life highs.

"Technically, while the Nifty has bounced back smartly, the intermediate trend remains down," HDFC Securities' told IANS.

"The downtrend is likely to continue once the immediate support of 10,138 points is broken. Crucial resistances to watch on the upside are at 10,492-10,605 points. A break of 10,866 points would change the trend of the Nifty."

Last week, both the key Indian equity indices -- (BSE) Sensex and the NSE Nifty50 -- came in for some rough weather due to global worries over high and US interest rates during the period, but managed to catch the upside in the final session of trade.

The market swung widely with major losses of over 2 per cent in just one session -- thereby pulling stock prices and the Indian currency lower.

Notwithstanding the general downturn, a timely plunge in crude oil prices, attractive valuations and liquidity infusion by the (RBI) lured investors back to the Indian market.

Consequently, the closed at 34,733.58 points, up 353.54 points or 1.02 per cent from its previous close.

Similarly, the wider Nifty50 of also made gains. It closed at 10,472.50 points, up 156.05 points or 1.51 per cent from the previous week's close.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, October 14 2018. 11:26 IST