The earnings season is here. Investors have now moved on from the rhetoric generated from budget session and have now put their noses back to where they should belong – corporate earnings numbers. So far, the government has been playing to the FII gallery and moving fast on their reform agenda – tweaking laws, creating more enabling environment, removing confusions over controversial policies and implementing steps to allow more foreign capital.
In the near term, investors are going to focus on earnings numbers – L&T, Maruti Suzuki, Bharti Airtel and HLL are lined up for next week. RBI policy review on August 5 will also be keenly watched for any macroeconomic commentary and inflation/interest rate signals.
Sensex ended this week up by 1.9% while Nifty was up by 1.7% and Midcap down by 1.9%
Monday - Sensex up by 0.3%, Nifty up by 0.3%, Midcap down by 0.1%
Markets went up led by rally in Reliance Industries after it reported quarterly earnings better than street estimates. In near term, markets will remain driven by corporate earnings as no new trigger is in sight.
Tuesday - Sensex up by 1.2%, Nifty up by 1.1%, Midcap up by 0.1%
Sensex and Nifty surged more than 1% and traded near their all-time highs led by telecom stocks following Idea Cellular's better-than-expected earnings. Bharti Airtel and Idea Cellular both rallied more than 5% as sentiment around telecom stocks improved.
Wednesday - Sensex up by 0.5%, Nifty up by 0.4%, Midcap down by 0.4%
Benchmark Indices continued on their winning run bolstered by gains in IT and banking leaders on upbeat earnings, higher capital inflows and positive global cues. TCS attained a market valuation of over Rs. 5 lakh crores (or about $84bn) for the first time. Bank of Baroda gained around 3% after RBI removed the stock from its caution list, allowing FIIs to invest in it. Jet Airways also rose around 4% after its chairman discussed its restructuring plan involving selling planes and renegotiating debt.
Thursday - Sensex up by 0.5%, Nifty up by 0.4%, Midcap down by 0.2%
Sensex and Nifty rose to their record highs after decision to raise FDI limit in insurance got cabinet approval. Modi government is doing its best to revive foreign interest in India and raising the FDI limit from 26% to 49% in capital starved insurance sector highlights its reform agenda. Cairn India slumped by 7% as company disclosed a related party transaction worth $1.25bn in the form of loan facility to parent Vedanta Group. Analysts have always been wary of this move where the new promoter group might take advantage of cash pile of Cairn India to fund their other projects – a step widely considered detrimental to minority shareholders’ interest.
Friday - Sensex down by 0.6%, Nifty down by 0.5%, Midcap down by 1.3%
Markets took a breather on Friday after continuously rising for nine sessions. Tata Motors declined most in six months after JLR price cuts in China raised concerns on margins in a key market.
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