Market Next Week: Q2 earnings, global cues, FII flows among other triggers will dictate indices’ trend – what should investors do?

Market Next Week: In absence of any major event, the second-quarter earnings, and global cues along with domestic currency’s movement and foreign investors' flow will dictate the trend for the markets next week, analysts said in the expectations.

The earnings season has kicked off with major IT companies releasing their July-September numbers earlier this week, which showed an overall growth in the quarterly results across segments.

“First, participants will react to the HDFC Bank’s number in early trade on Monday. Going ahead, we have some prominent names like ACC, Ultratech Cement, Indusind Bank, Axis Bank, Asian Paints, Bajaj Finance, ITC, and Hindustan Unilever who will announce their numbers along with several others,” Ajit Mishra, VP - Research, Religare Broking Ltd said in his next week expectations.

Amid all, the volatility in the market will remain high due to scheduled earnings and erratic swings in the global market, Mishra further said. “Participants should align their positions accordingly and we suggest focusing more on risk management.”

Similarly, Apurva Sheth, Head of Market Perspectives, Samco Securities said, “The quarterly results of the companies will occupy the centre stage. D-street will be interested to hear the management commentary about future earnings growth trajectory.”

Investors are encouraged to choose their investments with caution and wisdom in light of the several significant events that will soon take place, Sheth said in her suggestion to investors.

Technical Outlook

Nifty is consolidating in a range of 16,800-17,400 for the last two weeks and Mishra expects this consolidation to end soon. Though we’re still seeing buying interest in select stocks across sectors especially banking, a decisive close above 17,400 would help in regaining momentum and strengthening the bulls, the analyst at Religare Broking believes.

“The candles for the last three weeks are having tall wicks on both ends which indicates indecision among the traders due to volatility. Follow-up buying is expected as we have sustained above 17100 levels today which could take us towards 17500 levels soon,” an analyst at Samco Securities said.

Global Triggers

The US Industrial Production output will have an impact on markets throughout the world. This will be closely watched to see if the Factory activity has increased or decreased even more. Similarly, investors would be better able to predict the direction of the Chinese economy, which is scheduled to release its Q3FY22 GDP figures.

Market This Week

The Indian markets settled with a cut of over half a percent in the passing week amid excessive choppiness. Fear of global recession combined with mixed earnings and weak macroeconomic data dented sentiment and kept the tone negative for most of the week.

Both key indices, Nifty and Sensex, closed at 17,185.70 and 57,919.97 respectively. Banking and IT pack played saviour among the sectoral indices while energy, auto and FMCG traded under pressure. Meanwhile, the broader indices underperformed the benchmark, down between1.7-2.8 per cent.