Mumbai: As the markets open for trading on Tuesday, corporate earnings, US Federal Reserve meet and geopolitical worries are likely to take centre-stage. After touching record highs last week, it will be crucial for the markets to consolidate from here on and not lose steam. The markets are shut on Monday on account of Maharashtra Day.
“With the sustained rally in Sensex, we expect the markets to consolidate. Although there are concerns on the valuation front but this is being offset by strong liquidity flow, expectations of earnings revival and upbeat market sentiment. Global equities ended with one of their best weeks in recent times, ending with gains of 2-3%. Nasdaq also notched records high levels, closing above 6,000 levels for the first time,” said Sanjeev Zarbade, vice-president, private client group, research, Kotak Securities Ltd.
Some of the major companies which will declare March quarter earnings this week are Dabur, Bharat Financial Inclusion, ICICI Bank, HDFC, RBL Bank, Apollo Tyres, Godrej Properties and L&T Technology. Newly listed Avenue Supermarts, which owns D-Mart, will announce its quarterly results on 6 May.
Abnish Kumar Sudhanshu, director and research head, Amrapali Aadya Trading & Investments, said, “So far the results for the majority of heavy weights have been satisfactory, which is creating fresh buying in the market. Going ahead, we expect benchmark indices are likely to take cues from the macroeconomic data, expected on Tuesday. This is likely to throw light on the economic activity development.”
Nikkei Markit Manufacturing PMI and Services PMI for April will be released on 2 May and 4 May, respectively. Manufacturing sector activity jumped to a five-month high at 52.5 and services PMI rose to 51.5 in March.
Auto companies are likely to be in focus as April sales data by auto companies will also be out this week.
Realty stocks, which have gained majorly this year, will also be on investors’ radar as the much-awaited Real Estate (Regulation & Development) Act (RERA) will be implemented from 1 May. RERA is expected to bring in transparency in the sector.
Anuj Puri, chairman, JLL Residential, said, “This very critical Act literally holds key to the future growth of the Indian real estate sector. It has potential to clean up the sector at all levels. The current government understands that RERA’s implementation will not only help revive end-user sentiment but help further open up the Indian housing sector to foreign investments. With RERA about to kick in all earnest, the time has finally come for homebuyers in India to breathe free and invest confidently. No more will unscrupulous small builders or even larger organized developers be able to take buyers for a ride.”
Meanwhile, in the global markets, geopolitical tension may escalate as US President Donald Trump said he has left open the possibility of military action against North Korea if it conducts another nuclear test.
The two-day Federal Open Market Committee (FOMC) meeting will end on Wednesday and the central bank is not expected to raise interest rates. Global investors will watch out for Fed chair Janet Yellen’s speech for commentary on outlook as it has signalled for two more rate hikes this year.