Q2 earnings, global cues, monthly expiry among other triggers may influence holiday-shortened markets next week

Market Next Week: In the holiday-shortened next week, the market will first react to major corporate earnings as well as to the global cues, an analyst expects. The Indian indices are also likely to be influenced by the Rupee movement, foreign investors’ flow, and monthly derivatives expiry among other triggers in the coming week.

The coming week is a holiday-shortened one and it also marks the beginning of the new Samvat 2079, Ajit Mishra, VP - Research, Religare Broking said. “We have a special one-hour Muhurat trading session on Monday, October 24 on account of Diwali.”

The scheduled monthly derivatives expiry will keep the volatility high; besides, earnings and the performance of global markets will remain on the radar, the market analyst Mishra said. 

“On the earnings front, the market will first react to the results of index majors like Reliance, ICICI Bank, and Kotak Bank. Besides, other prominent names like Tata Chemicals, Dr. Reddy’s, Maruti, Vedanta, and Tata Power will announce their numbers during the next week,” he added. 

The domestic markets have managed to put on a good show so far amid the mixed global cues however we’ve been seeing restricted participation, Mishra said, adding that the banking sector is leading the markets from the front while others are playing a supportive role in between.

Amid all, the analyst at Religare Broking feels that the market tone would remain positive, however, the focus should remain on stock selection and risk management.  

“We are heading into a truncated festival week where bulls have reason to celebrate Diwali on a higher note, as the US market witnessed a sharp rebound in Friday's trading session,” Santosh Meena, Head of Research, Swastika Investmart said in his market next week expectations.

“The domestic market will continue to have an eye on the direction of global markets, the dollar index, US bond yields, and crude oil prices. On the domestic front, October month expiry may lead to some volatility whereas Q2 earnings will cause stock-specific movement,” he also added. 

The markets this week resumed recovery and gained over 2 per cent, tracking upbeat earnings and supportive global cues. Buoyancy on the banking front combined with a buying in select IT, energy, and FMCG majors kept the tone positive for most of the week.

Consequently, the Nifty index settled around the week’s high to close at 17,576.3 levels, while BSE Sensex jumped over 100 points to close above 59,300 levels on Friday. On the contrary, the broader indices underperformed as they gained in the range of 0.5-1.4 per cent.