Q2 earnings, global cues, dollar movement among key factors that may guide markets this week

On Friday, the Nifty ended 1 per cent higher at 17185.70 points, and the Sensex closed 1.2 per cent higher at 57919.97 points. However, for the week, the Nifty 50 fell 0.7 per cent.

With major economic data drivers in the US and India for the market out in the week gone by, investors’ focus will be on the September quarter earnings in the coming week.

Global markets will continue to be tracked, given that US Fed rate hike fears persist and have kept foreign institutional investors on a sell mode. In the week ended October 14, FIIs net sold Indian equities worth $854 million, compared with just $84 million worth of shares sold in the preceding week.

“The market will look for direction from Q2 earnings and global cues. Next week, many financial and cement companies will come out with their Q2 results. Global markets are quite volatile, which may lead to volatility in our market as well,” said Santosh Meena, head of research at

.

While global markets could bring in some volatility, experts believe that festivity cheer in India in the run-up to Diwali will support equities and keep the downside limited.

Buying at a dip is the best strategy in this scenario, with a focus on domestic economy-oriented stocks and sectors, according to Vinod Nair, head of research at .

“The sectors which are expected to outperform are IT, pharma, FMCG, durables, green initiatives, specialty chemicals, and mass manufacturers with value buying as the theme,” he said.

Q2 earnings
Private sector bellwether

on Saturday reported a strong set of quarterly numbers. Net profit rose 20 per cent on year in Q2, led by strong loan growth and lower provisions.



Similarly, ace investor Radhakishan Damani-owned also reported strong double-digit growth in both net and revenue for Q2.

The coming week will see

, , , , , , , , , , PVR, L&T Technology Services, among many others reporting numbers.

Dollar movement

Given the upward trend of the dollar amid global macroeconomic concerns, the movement of the currency in the coming week will be closely monitored by investors. The rupee on Friday ended at a record closing low of 82.3500 a dollar. So far in October, the dollar index has risen 1 per cent.

Technical indicators
Despite some smart gains on Friday, Nifty failed to close above its previous week’s range. For the last three weeks, the index has been trading in a range of 16,800-17,350 levels amid volatility.

The candles for the last three weeks have tall wicks on both ends, which indicates indecision among the traders due to volatility, said Apurva Sheth, head of market perspectives at Samco Securities.

Follow-up buying is expected as Nifty sustained above 17,100 levels, which could take it towards 17,500 soon, Sheth said. On the lower side, 16,800 will act as an important support in the coming trading sessions.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)