Investors will keep a watch on third quarter results of frontline companies for market

RELATED ARTICLES Sensex ends flat; outlook still weak Sensex regains 16k level; ends 274 pts higher NSE loses trillion-dollar market cap tag; BSE a whisker away NSE loses trillion-dollar market cap tag; BSE a whisker away Rupee plunge: Losses double for FIIs in Indian stocks

direction this week. Experts said the third quarter numbers announced so far are not as poor as expected. Since global sentiments have also improved over the past few weeks, they expect foreign money to keep on coming into risky assets classes of emerging markets, which includes Indian equities.

Investors will soon start building expectations from forthcoming Union budget, analysts said.

“Quarterly earnings numbers will continue to pour in and they may decide the future course for the market,” said Gaurav Dua, head of research at Sharekhan.

Major Nifty companies that will announce quarterly earnings this week include ICICI Bank, PNB, Sun Pharma, DLF, ONGC and Dr Reddy’s. Data available with market watchdog Sebi show foreign institutional investors have infused a whopping Rs 9,073 crore into equities so far this month. Analysts expect the trend to continue going forward.

“There was no major disappointment in third quarter results, which has helped the ensuing rally. Developments of the euro zone have taken a backseat for now and risk capital is moving towards equities world over, leading to positive sentiments. Going by the style and characteristic of FII Investments, we believe they are likely to continue with their investment in emerging markets,” said Vivek Mahajan, head of research at Aditya Birla Money.

Mahajan advised investors to stay invested in quality stocks. He believes news flow emanating on possible budget moves will create opportunity for trading.

Edelweiss Financial Advisors in a note said the early signs of policy action by the government on major sectors such as power, airlines and capital goods are already visible.

”Also, with the US Federal Reserve and ECB keeping their banking system flush with liquidity, risk assets may continue to run up. In the short term, volatility will be high and hence a bottom-up approach will work better. Therefore, we prefer stocks with strong management, strong cash flows and high earnings visibility. At the same time, beaten down stocks in depressed sectors which meet these conditions should be looked at,” the note said.

Technical charts hinted at further upside. Shrikant Chouhan, head of technical research at Kotak Securities, said: “The upward move in the market will face stiff resistance at5,220 level, as the 200-day moving average lies at this point. If Nifty sustains above this point, it will eye higher levels at 5,300 and 5,400.”

Sensex and Nifty jumped 2.96 per cent and 3.09 per cent, respectively, last week.

Meanwhile, the share buyback programme of Reliance Industries is set to kick off from February 1.