Mumbai: Dalal Street is likely to open on a positive note this week following improvement in global cues, while IT major Infosys’ guidance announcement for FY10 may bring in some consolidation in the market, analysts said.
Marketmen said the quarterly earnings figures and the revenue guidance of IT bellwether Infosys would determine the direction of the market in the second half of this week, which has gained substantially in the past five weeks.
“Uptrend will continue in the domestic market only if Infosys guidance is positive. If the Infosys’ FY10 guidance is below Street expectations, it would provide the market with a reason to go for sideways consolidation,” Kejriwal Research and Investment Services head Arun Kejriwal said.
Echoing similar views, brokerage firm Bonanza Portfolio Assistant vice president Avinash Gupta said, “Market is likely to remain on strong growth path this week on positive global cues, while Infosys’ quarterly results and guidance may hold the key for market movement.”
The main event on the domestic front would be the beginning of the corporate earnings season this week, with IT major Infosys Technologies announcing its earnings figures on Wednesday.
“A spate of positive developments have made the market move one-side up for the past five weeks. This week the bulls might sit back and take rest and consolidate its gains,” SMC Global vice president Rajesh Jain said.
”We expect earnings of the BSE-30 index to decline by 15.1% year-on-year and earnings of the BSE-30 index (excluding Energy) to decline by 14.3% Y-O-Y,“ Kotak said in its preview report for the last quarter.
Another brokerage firm Prabhudas Lilladher, in its January- March’09 earnings preview, said, “Most sectors are expected to report muted revenue growth, weak margins and poor earnings ... However, it is apparent that better-than-average performance is very marginal and underscores the fact that slowdown in earnings is fairly widespread.”
Sectors such as banks, automobiles, metals, media and financial services are likely to act as a drag on the Sensex’s earnings. While technology, cement oil & gas and capital goods companies are expected to report “relatively better numbers”, it said.
Further, brokerage and equity research firm Religare Hichens Harrison (RHH) stated that mark-to-market losses, indicating fall in the value of an investment from the book value level to current market price, would be a key concern for companies.
“Though the implementation of AS-11 has been deferred to 2011, we believe Indian corporates face a high risk of MTM losses,” RHH said in a report.
The Bombay Stock Exchange benchmark Sensex has lost 38% on an Y-o-Y basis till March 2009.