BackSensex, Nifty likely to be volatile this week as Q1 earnings kickstart
Key companies that will report first-quarter earnings this week are IndusInd Bank, TCS and Infosys
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New Delhi: Benchmark stock market indices Sensex and Nifty are expected to be volatile this week as corporate earnings of June quarter kickstarts while global trade war concerns between the US and China continue. Investors are also expected to closely watch out price movements of crude and the rupee. “Markets are awaiting and fearing the outcome of trade-war between US and China but realistically $35 billion of purported tariff goods is insignificant when seen from a larger scheme of things. This fear will create an opportunity for investors and traders to lap up shares and take long positions. Sectors that are expected to underperform are IT, metals and FMCG," said Jimeet Modi, founder and CEO of Samco Securities & StockNote.
Analysts at Kotak Institutional Equities expect strong growth in the net income auto, consumer, metal and mining and pharmaceutical companies while banks and telecom companies may see net loss in Q1FY19. “We expect net income of the BSE-30 Index to increase 6% year-on-year and that of Nifty-50 index to increase 12% year-on-year," it said on a note on 5 July.
Key companies that will report Q1FY19 earnings this week are IndusInd Bank, TCS and Infosys. HDFC Securities Institutional Research expects IT sector earnings to accelerate, despite cross currency headwinds after six quarters. Revenue growth in first quarter of FY19 is expected at 1.3% and 9.6% QoQ and YoY respectively. “Operating performance is expected to remain stable despite headwinds of cross currency, wage increase, visa cost impact, which are expected to be offset by higher efficiencies and rupee depreciation," it said in a note on 6 July.
Among macros, industrial growth data, measured on the Index of Industrial Production (IIP) for the month of May will be released on 12 July. Industrial output jumped by 4.9% in April this year, spurred by higher growth in manufacturing and mining sectors. Retail inflation data for June will also be released this week. India’s retail inflation in May rose to a four-month high of 4.87% due to costly petrol and diesel, and a weak rupee.
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