Mumbai: Weak first quarter earnings by top-valued company Reliance Industries are likely to cast a shadow over stock markets when it opens on Monday even as investors would be looking for directions from RBI’s quarterly monetary policy review this week.
Market observers said bourses will open this week on a weak note after the poor numbers by RIL and may even outdo the handsome gains posted last week on impressive earnings by India Industry.
“...though market may witness depressed trading initially on the back of weak earnings figure of Reliance Industries. It will eventually return to the positive zone,” SMC Global vice-president Rajesh Jain said.
Marketmen said though below-than-expected results by RIL would cast pressure on the market in the opening trade but gradually global cues would take over and RBI’s credit policy would only impact certain sectors.
“RBI’s action can only have significant impact on realty and financial sectors but overall there would be volatility in the market and it would witness sideways to positive movement,” Bonanza Portfolio assistant vice-president Avinash Gupta said.
The Reserve Bank would come out with its first quarterly monetary policy review on 28 July. The apex bank faces a tough task taking dovish stand in view of the government’s massive borrowing plans.
Jain also said that “amid the general positive bias in the market, D-Street will take cues from the global market...”
The BSE benchmark index Sensex closed higher by over 4% at 15,378.96 points on Friday last week and the National Stock Exchange’s Nifty gained 4.42% to 4,3568.55 points during the week.
After the close of market hours last week, RIL reported a 11.5% fall in net profit at Rs3,636 crore for the first quarter of this fiscal on falling refining margins and reduction in fuel demand.
Besides, analysts feel that the expiry of futures and options contracts on 30 July would keep the market volatile this week.
“A lot of money is still moving around the market and with lot of activity expected on the US front this week, it would mostly be volatile trade,” Unicon Financial chief executive G Nagpal said.
Also corporate results would keep the domestic market in an upbeat mode as most companies are posting better quarterly figures.
Several Indian companies, including State Bank of India, Tata Motors, Tata Steel, Sterlite Industries and NTPC, are scheduled to report results next week.
Besides, the foreign institutional investors have been showing confidence in the Indian market and analysts feel that they would further drive the market forward.
With signs of revival in the secondary market, activity in the Indian primary market is brewing with the Rs3,016 crore initial public offer of Adani Power to begin on Tuesday.
On Friday, the US markets were flat with the Dow Jones Industrial Average gaining 24 points to 9,093.24, and S&P 500 advancing 0.30% to 979.26 points. However, tech heavy Nasdaq fell marginally to 1,965.96 points.