Quarterly earnings, global factors to drive markets in holiday-shortened week

Corporate earnings and global trends would set the tone for the equity market in a holiday-shortened week ahead where volatility may also come into play amid the scheduled monthly derivatives expiry, analysts said.

The BSE and NSE will conduct a one-hour special muhurat trading session on Monday, marking the beginning of Samvat 2079 -- the Hindu calendar year that starts on Diwali.

Markets would remain closed on Wednesday for 'Diwali Balipratipada'.

"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," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

The market will continue to have an eye on the direction of global markets, the dollar index, US bond yields and crude oil prices, Meena added.

"On the domestic front, October month expiry may lead to some volatility whereas Q2 earnings will cause stock-specific movement," Meena noted.

The scheduled monthly derivatives expiry will keep volatility high. Besides, earnings and the performance of global markets will remain on the radar, said Ajit Mishra, VP - Research, Religare Broking Ltd.

Investors would also keep a track on the rupee-dollar trend, foreign institutional investors (FIIs) trading activity and Brent crude oil prices.

"On the earnings front, participants will first react to the results of index majors like Reliance, ICICI Bank and Kotak Mahindra Bank. Besides, other prominent names like Tata Chemicals, Dr Reddy's, Maruti, Vedanta and Tata Power will also announce their numbers during the week," Mishra added.

Billionaire Mukesh Ambani's Reliance Industries Ltd on Friday posted flat growth in net profit in the September quarter after a newly introduced windfall profit tax and lower refining margins dented earnings in the mainstay oil business.

The oil-to-retail-to-telecom conglomerate's consolidated net profit at Rs 13,656 crore in July-September was almost unchanged from Rs 13,680 crore net earnings in the same period last year, according to a company statement.

The country's second largest private sector lender ICICI Bank on Saturday reported a 31.43 per cent jump in its September quarter consolidated net profit at Rs 8,006.99 crore.

Its peer Kotak Mahindra Bank posted an about 27 per cent rise in net profit at Rs 2,581 crore for the quarter ended September 2022.

"As there are no major triggers for this week, the market direction will be based on global sentiment and the earnings season," said Vinod Nair, Head of Research at Geojit Financial services.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, said in the near term, domestic markets will continue to track global developments and one can expect stock-specific action amid the ongoing Q2 FY23 results season.

Last week, the Sensex climbed 1,387.18 points or 2.39 per cent.

"Buoyancy on the banking front combined with buying in select IT, energy and FMCG majors kept the tone positive for most part of the week," Mishra said.