Automobile companies, which saw a hit in their August and September sales owing to Kerala floods impact, will hope that these figures get revived ahead of crucial festive season as well.
Earnings, auto sales and reactions to results announcements, among others, will play a key role for the market in the forthcoming week. With around 800 BSE companies set to announce results, it will be a busy week for traders looking for cues to bet on.
Automobile companies, which saw a hit in their August and September sales owing to Kerala floods impact, will hope that these figures get revived ahead of crucial festive season as well.
The Nifty began November series on a negative note, but investors could take note of the fact that psychological mark of 10,000 has been held on to. The Sensex ended the session 340 points lower.
For the week that ended on October 26, 2018, both Sensex and the Nifty have lost around 3 percent.
“…Investors should keep liquidity on hand, but traders can take opportunities by taking short term long bets. Nifty50 ended the week at 10030, down by 2.65%,” Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote, said in a statement.
Here are 10 factors that will keep investors busy.
Nearly 800 BSE companies to declare earnings
In the upcoming week, 796 BSE companies will be declaring their earnings for the September quarter. Among them, the key names to watch out would be Ballarpur Industries, BPCL, Colgate Palmolive, DCM Shriram, Granules India, Gruh Finance, HDFC AMC, Just Dial, LIC Housing Finance, Mahindra Holidays, Snowman Logistics, Supreme Industries, Union Bank of India, Bank of Baroda, Container Corporation, Dena Bank, JK Tyre, Manpasand Beverages, Motilal Oswal, Tech Mahindra, Adani Power, Canara Bank, Dabur, Tata Motors, and HDFC, among others.
ICICI Bank reactions
Investors could react to a fall in ICICI Bank’s fall in profit for the September quarter.
The lender’s second quarter profit fell sharply by 55.84 percent to Rs 908.88 crore compared to the year-ago period. Elevated provisions and high treasury base hit the bottom line.
Net interest income, the difference between interest earned and expended, grew 12.41 percent on year to Rs 6,417.6 crore with good loan growth of 12.8 percent YoY and margin improvement.
Asset quality improved during the quarter. Gross non-performing assets as a percentage of gross advances were lower at 8.54 percent against 8.81 percent in the previous quarter due to fall in slippages.
Auto sales
The upcoming week will see automobile majors declaring their sales data for September. After facing an impact in August due to Kerala floods, companies have doled out several offers in a bid to shore up demand ahead of festive season.
Auto stocks have been caught in a bear trap in the past one week, with Nifty and BSE auto indices shedding over a percent. Subdued performance by Maruti Suzuki has also weighed on other automobile names.
Corporate Action
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A few stocks are likely to be in focus on the back of corporate action such as going ex-dividend or split. For the upcoming week, names such as Asian Paints, Crisil, Cyient, TVS Motor, L&T Infotech, Hindustan Zinc, ICICI Prudential, and Hexaware go ex-dividend. These stocks could be in focus based on this action.
Meanwhile, Motherson Sumi goes ex-bonus on October 30, 2018.
Jindal Worldwide and DFM Foods will go ex-split on October 31, 2018 and November 1, 2018.
Lastly, Cochin Shipyard’s shares are likely to be on investors’ radar as it goes ex-buyback on October 30, 2018.
Technical Factors
The index formed large bearish candle which resembles a ‘Bearish Belt Hold’ kind of pattern on weekly scale.
A ‘Bearish Belt Hold’ pattern is formed when the opening price becomes the highest point of the trading day (intraday high) and the index declines throughout the trading day making up for the large body. The candle will either have a small or no upper shadow and a small lower shadow.
The overall chart pattern of weekly is showing a sharp down trend and a next crucial lower levels to be watched at 9900-9875 for the upcoming week, analysts at HDFC Securities wrote in a report.
“However, upside bounce as per daily timeframe is due, but any upside bounce from the low is going to be a sell on rise opportunity in the market for near term,” they further wrote.
Crude
Prices of crude have seen a sharp fall in the past week on the back of a global rout in equity markets. Brent Crude fell over 3.5 percent for the week gone by. Any further downward movement will be noted as a positive cue by Indian investors.
A falling crude is seen to reduce import bill for a nation such as India, which relies on imported oil to fulfil its requirements.
So, this movement, going forward, will be keenly watched by investors in the upcoming week.
Rupee
The market will also keep an eye on movements in the Indian currency, which has been largely subdued through the week.
The currency has not visited its all-time low levels of 74.48 per US dollar and has traded in a narrow range around 73.40 per US dollar.For the upcoming week too, investors will eye movements on the currency as a falling crude could have a positive impact here. So, these interdependent factors will play a key role for the market, going forward.
Global Cues
The upcoming week could see traders eyeing any developments on the trade war front between US and China. Geopolitical tensions and issues in Italy too could weigh on the global front.
“What is currently pressing on Europe has been the news around Italy with the government wanting to go ahead with a budget deficit of 2.40 per cent of GDP which is not to the liking of the EU and the EU is likely to ask for a review of the same for probable reduction. This is at a time when the Italian bonds have been downgraded by Moody’s to Baa3 just a notch higher than junk, as these factors gave rise to the fear of a gradually incubating Italian exit from the EU,” Joseph Thomas, Head-Research, Emkay Wealth Management said in a statement.
Apart from that, global markets have taken a hit on the back of fears of global growth after earnings in the US have disappointed Street estimates. The Dow managed to wipe off all gains of 2018 last week.
Macro Data
The beginning of the month will see some macro data being declared. So, investors could watch out for manufacturing and services purchasing managers’ index (PMI) back home.
India’s infrastructure output will also be out on October 31, 2018 as well.
Additionally, on the global front, Japanese industrial production data, Bank of Japan’s monetary meeting, manufacturing PMI for Japan and US jobless data will be eyed by investors.
Stocks in News
Nestle India Q3: Profit jumps 30 percent to Rs 446.1 crore versus Rs 343.2 crore; revenue rises 16.9 percent to Rs 2,939.4 crore versus Rs 2,514.1 crore YoY.
Sintex Plastics Technology Q2: Profit rises to Rs 40.36 crore versus Rs 26.06 crore; revenue falls to Rs Rs 1,172.15 crore versus Rs 1,432.90 crore YoY.
Shoppers Stop Q2: Profit at Rs 13.21 crore versus loss at Rs 21.8 crore; revenue rises to Rs 864.53 crore versus Rs 837.6 crore YoY.
Eros International Media Q2: Consolidated profit rises to Rs 77.01 crore versus Rs 59.32 crore; revenue increases to Rs 292.88 crore versus Rs 217.93 crore QoQ.
DB Realty Q2: Loss at Rs 16.8 crore versus Rs 12.4 crore; revenue falls to Rs 0.20 crore versus Rs 2.44 crore YoY.
Jindal Stainless Q2: Loss at Rs 36.44 crore versus profit at Rs 27.30 crore; revenue jumps to Rs 3,081.4 crore versus Rs 2,607.84 crore YoY.
Mawana Sugars September quarter: Loss at Rs 11.85 crore versus loss at Rs 11.13 crore; revenue rises to Rs 246.75 crore versus Rs 175.09 crore YoY.
Deepak Nitrite Q2: Profit rises to Rs 28.06 crore versus Rs 22.68 crore; revenue increases to Rs 432.71 crore versus Rs 353.6 crore YoY.
Mawana Sugars: Board approved the proposal for investment of Rs 40 crore for installation of incinerator at distillery plant, Nanglamal Sugar Complex, Nanglamal, Meerut; and to explore the possibility of disposing of its operating chemical manufacturing unit Siel Chemical Complex (SCC) located at Rajpura, Distt. Patiala, Punjab in order to ensure long term financial stability of the company.
Axis Bank: The bank has executed an agreement for sale of 19,79,900 equity shares at Rs 825 per share with HDFC Bank, resulting in a total cash consideration of Rs 163.34 crore. HDFC Bank currently holds 5 percent of the total equity capital of NSDL, which increased to 9.95 percent after this transaction.
Yes Bank: Bank said search committee has finalised the profile for a potential candidate for the post of CEO and got a representative list of candidate pool, based on initial industry mapping.
Peninsula Land: Company, through its subsidiary Peninsula Holding and Investment Private Limited (PHIPL) entered into a securities purchase agreement to acquire 71 percent stake in RR Mega City Builders Limited, thereby making it a step-down subsidiary of the company.
Va Tech Wabag: Parthasarathy Gopalan, Chief Financial Officer of the company has resigned from the position.
Sterlite Technologies: Company launched all new – FTTx MANTRATM – an end-to-end FTTx-as-aservice solution which allows swift roll-out of Fibre-to-the-Point (FTTx) networks at the scale, latency and agility needed to suit all future requirements of 5G, Internet of Things (IoT) applications, for global communication service providers, data centres and citizen networks.
Dr Lal PathLabs: NCLT approved the scheme of amalgamation between company and Delta Ria and Pathology Private Limited.
Max Alert Systems: The adjudication proceedings vide show cause notice dated August 7, 2018 are disposed off without imposition of any monetary penalty.
Sayaji Industries: ICRA assigned MA- (Stable) rating for public deposit programme (unsecured) of the company.
Hindalco Industries: Company stopped mining operation at Durgumanwadi Mine since March 17, 2018. Stopping of mining operation has no material impact on operations or financial performance of the company.