March quarter earnings and elections are going to drive markets movement this week. In the global markets too, earnings will be key for equities. This week will go a long way in determining whether investors should be concerned about the dawning of an earnings recession or whether back-to-back quarters of negative growth can be avoided in what is the heaviest week for profit reporting by US companies.
In the US, big companies like Facebook, Amazon, Coca-Cola and Microsoft will report earnings this week. Among key Indian companies to declare March quarter earnings this week are Maruti Suzuki, Yes Bank, Hero Motocorp, Tata Steel, Axis Bank, Bharti Infratel ACC, SBI Life, HDFC Life.
During this week, the markets are expected to consolidate and then turn volatile due to expiry of April series Futures and Options.
“The near term trend of Nifty is range bound and one may expect this high low range of 11,750-11,550 levels to continue for the next curtailed week. Further upside from here could encounter a resistance at 11,710-11,750 levels in the next week. The expected range or consolidation movement is unlikely to damage the near term uptrend status of the market, "Nagaraj Shetti Technical Research Analyst HDFC securities.
On Monday, HDFC Bank and Reliance Industries stocks will be in focus after posting their quarterly earnings.
Net profit of Reliance Industries rose 9.79% to ₹10,362 crore for the quarter ended 31 March while revenue rose 19.4% to ₹1.54 trillion in the same period. This is the second straight quarter when the Mukesh Ambani-led company has reported a quarterly profit of more than ₹10,000 crore.
RIL’s gross refining margin (GRM), or the amount a refiner earns by refining one barrel of crude oil, narrowed to a 17-quarter low at $8.2 per barrel. On a sequential basis, GRM declined 7%.
“Management is constructive about refining margins as diesel spreads are likely to get a boost from implementation of IMO 2020, as 3.5mbpd marine fuel Sulphur standards are likely to come down. RIL is well positioned to benefit given their high complexity. However, gasoline spreads are likely to be under pressure from high new refinery capacity addition of 2mbpd against demand growth of 1.3mbpd," said Prabhudas Lilladher in a note on 19 April.
HDFC Bank Ltd reported a record Q4 net profit of ₹5885 crore up 22.6% meeting market expectations as the country's biggest lender by market value raked in higher interest and fee income. Asset quality improved slightly, with gross bad loans as a percentage of the total at 1.36 % by the end of March, compared with 1.38 % in the previous quarter and 1.30 % in the same period last year.