The Bombay Stock Exchange, right, stands on Dalal street in Mumbai. (Photographer: Adeel Halim/Bloomberg)

Earnings, Rupee, Global Trend To Drive Stock Markets This Week, Say Analysts

The ongoing quarterly results season, macroeconomic data announcements and movement of the rupee will determine the stock market trend this week, according to analysts.

Volatility in the global markets may also play a key role, they said.

"The market has been correcting in the last two months and in the near-term considering the technical factors, we are bound to see some relief,” said Vinod Nair, head of research, Geojit Financial Services. "Earnings season will gather pace in the coming weeks and as market participants will be keen on comparing consensus earnings with actual which will dictate the market momentum.”

"And if the global volatility continues, investors will be more focused on haven assets like gold and bonds," Nair said.

Blue-chips such as Bank of Baroda Ltd., Tech Mahindra Ltd., Adani Power Ltd., Canara Bank, Lupin Ltd., Tata Motors Ltd., HDFC Ltd., Axis Bank Ltd., NTPC Ltd.and Punjab National Bank are slated to report their quarterly earnings this week.

"While the market has corrected and valuations have come down close to reasonable levels, and we may be quite close to the bottom, by no means an extension of losses further can be ruled out," said Joseph Thomas, head of research, Emkay Wealth Management.

The domestic markets are still under the shadow of the developments around IL&FS, the liquidity crisis faced by the NBFCs and the liquidity deficit in the inter-bank market, Thomas said.

"Manufacturing PMI and infrastructure output numbers are ahead and will be seen crucially while the leads will also be taken from ICICI Bank's result,” said Mustafa Nadeem, chief executive officer, Epic Research. “Mostly the trend will be in tandem with the global markets."

ICICI Bank Friday reported a 42 per cent drop in its consolidated net profit to Rs 1,204.62 crore for the quarter ended September 2018. The results were announced post market hours.

During the last week, both key indices—Sensex and Nifty—recorded their second straight week of losses by falling 966.32 points, or about 3 per cent, and 273.55 points, or 2.7 per cent, respectively.