Bears took control of Dalal Street last week as the market erased all its gains from the previous week, with the Nifty falling 1.6 percent to end tad above 10,300 levels on October 19.
The fall was caused by sell-off in the later part of the week due to liquidity and asset quality concerns in non-banking financial companies (NBFCs), weak global cues on growth worries, mixed corporate earnings and consistent outflow from foreign institutional investors (FIIs). But stability in crude oil prices and the rupee led support to the market.
Earnings will continue to be in focus as 15 Nifty companies will announce their Q2 earnings in F&O expiry week. Experts caution there could be a bit of volatility as well as stock-specific action.
“The market will continue to trade rangebound this week. With the froth in the market beginning to fade away, we believe no new lows will be reached at least till expiry," Jimeet Modi, Founder and CEO at SAMCO Securities & StockNote, said.
However, volatility will remain heightened due to the uncertainty in macros because of rising trade war fears and impact of oil prices, Modi said.
He said the short-term mood will be mainly guided by corporate results. Therefore, investors are advised to be very selective in their purchases and avoid any leverage at this juncture.
The ongoing liquidity crunch in NBFCs and concerns over upcoming assembly elections in five states are likely to cap market upside, experts stated.
Vinod Nair, Head of Research at Geojit Financial Services, said the ongoing turmoil led by financial crunch in the domestic economy, global risk-off and worries over upcoming elections is likely to weigh on markets.
Earnings
July-September quarter earnings season, so far, has been mixed and there was no major disappointment from companies, which could be one of reasons for supporting markets at lower levels.
This week is also going to be busy one for Dalal Street as more than 300 companies will release their second quarter results, including 15 Nifty50 firms.
ICICI Bank, Asian Paints, Maruti Suzuki, HCL Technologies, Dr Reddy's Labs, Bajaj Finance, Bharti Airtel, Wipro, Bajaj Finserv, Bharti Infratel, Bajaj Auto, Kotak Mahindra Bank, Yes Bank, UPL and ITC are among the big names which are going to announce earnings this week.
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