By Rohit Vaid,
Mumbai : The positive sentiment in the Indian equities will continue as experts point to supportive factors like encouraging industrial growth data, expected slowdown in inflation, positive guidance and the continuation of the government’s reform agenda which will keep the markets buoyed.
The market’s tone will be set by the fourth quarterly results season, March inflation data and the government’s reform agenda in the upcoming parliament session.
“The markets are expected to continue their healthy performance, as India is one of the few countries where a rate cut is expected, growth is stable and rising and inflation is seen under control,” said Dipen Shah, head of private client group research, Kotak Securities.
“The government’s ambitions on the GST (goods and service tax), the land bill and other reforms programmes in the upcoming parliament session will be keenly observed by Indian and foreign investors,” Shah told IANS.
Parliament’s budget session will resume April on 20, with the government expected to aggressively push key pending bills like the ones on the now re-promulgated land ordinance and on black money stashed away abroad.
Another key trigger in the coming week will be the March CPI (consumer price index) data that will be released on Monday.
The CPI-based inflation rose to 5.37 percent for February from 5.19 percent in January and 4.28 percent in December 2014.
The markets will also factor in the fresh official data on India’s factory output that indicated the steepest growth yet in nine months at five percent, against a 2.6 percent rise in January. The data had come after Friday’s closing bell.
The results season for the fourth quarter will also kick off in the week starting April 13, with the first major result being that of Tata Consultancy Services (TCS) on April 16, followed by Reliance Industries on April 17 and Wipro on April 21.
“Further investments in the market would only take place depending on the outlook given by the companies in their fourth quarter results. The Indian markets are in a situation where earnings need to catch up with the expectations of the investors,” Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
“Global issues like the financial outcome in Greece, crude oil prices and the Middle East crises would also be of key interest to the Indian markets,” Nevgi added.
Experts added that though the markets have factored in that the fourth quarter results will be subdued, any corrections will solely be limited to specific stocks.
“Going forward, the fourth quarter earnings are relevant largely to understand the outlook of banks (the restructuring of non-performing assets) and other sectors,” Vinod Nair, head, fundamental research, Geojit BNP Paribas, told IANS.
“A large chunk of the poor performance last month was due to the tepid budget session, downgrade of Q4 and profit bookings. Therefore, we can assume that poor expectation is already factored in the market unless there is any major negative surprise,” Nair added.
The benchmark, 30-scrip S&P Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) gained 619 points or 2.19 percent during the weekly trade ended April 10 at 28,879.38 points.
Major events such as Moody’s revision of India’s sovereign ratings outlook to “positive” from “stable” and Fitch’s reaffirmation of its stable outlook on India buoyed the markets.
The think-tank of the rich nations, the Organisation for Economic Cooperation and Development (OECD), also endorsed India’s economic expansion projections.
The central bank’s dovish language on the economy’s prospects also boosted the markets, which expect policy rate cuts going forward.
Most sector indices of the BSE closed in the positive with realty, FMCG (fast moving consumer goods) and metals each gaining more than five percent.
During the week before, the barometer index rose 801.55 points, or 2.91 percent.
(Rohit Vaid can be contacted at [email protected])