GDP forecast, Q3 earnings to affect markets this week
Mumbai: On Monday, the markets are expected to react to the government’s estimates of slower economic growth in the current fiscal. The forecast released by the Central Statistics Office (CSO) on Friday said the country’s gross domestic product (GDP) will grow by 6.5% in FY18, down from 7.1% growth clocked in the last financial year.
Investors are likely to be cautious due to concerns on fiscal slippages and a sharp up-move in crude prices.
“Market is trading at premium valuation supported by strong liquidity on expectation earnings revival and positive global cues... Further, market is wary of a populist budget given this is last one before general elections. In the immediate future market will look for more budget related cues and as per progress of Q3 results season,” said Vinod Nair, head of research at Geojit Financial Services.
December quarter earnings season will kick-start with Tata Consultancy Services, Infosys and IndusInd Bank reporting their Q3 results this week. ICICI Securities Ltd expects organic revenue growth in constant currency terms to improve for all large-cap companies within their coverage. It sees Tech Mahindra and Wipro as being better placed to grow their margins, with Infosys expected to defend margins better in FY19 as well given an expectation of abatement in realisation pressures that the company faced in FY16 and FY17.
In a quarter hit by furloughs and holiday season, Edelweiss Securities Ltd estimates the top five technology firms to clock 0.7-2.7% dollar revenue growth on sequential basis.
In the primary markets, initial public offer (IPO) of Apollo Micro Systems Ltd will open for subscription on 10 January with a price band of Rs270-275 per share. The company aims to raise Rs156 crore through the share sale. This is the first IPO of 2018.
Industrial production data for November and inflation data based on consumer price index (CPI) for December will be released this week. In November, retail inflation had accelerated to a 15-month high of 4.88%, while industrial production slowed down to 2.2% in October.