Indian Markets Outlook for the week – 23.May.2016 to 27.May.2016
Action in domestic equities will be
stock-specific next week, as investors will focus on corporate earnings, 13 of
which will be of Nifty 50 constituents. The underlying bias for the market is
seen weak after benchmark indices declined
nearly 1% this week. Yesterday, the Nifty 50 and S&P BSE Sensex ended down 0.4% each at
7749.70 points and 25301.90, respectively. Equities will also be volatile next week on account of the
expiry of May derivatives contracts next week. Nifty (50) is trading on the edge and volatility
will further inch higher due to derivative expiry in the coming week.
In addition, cues from global front
and movement in crude oil prices will continue to influence our markets. Among sectors, banks' and
other rate sensitive stocks may be under next week due to a weak rupee. Yesterday, the currency
ended at its lowest level since Mar 2 at 67.44 per dollar. The weakness in the
rupee, though, may benefit export-oriented sectors like information technology and
pharmaceuticals. However, pharmaceutical giant Lupin may continue its decline
next week. Yesterday, the stock slumped over 9% to 1,504.80 rupees on concerns
over higher costs on Gavis Pharmaceuticals' integration and
regulatory issues at the Goa unit.
EARNINGS
WATCH
Among the 13 Nifty 50 companies that
will report their March quarter earnings next week, State Bank of India will be
particularly in focus for its asset quality. The stock hit a one-month low
today as investors became jittery about the lender's asset quality after its
state-owned peers reported a sharp rise in provisions and higher non-performing
loans. India's largest lender will report its Jan-Mar earnings on May 27.
Investors will also await Larsen & Toubro's and Tata Steel's earnings on Wednesday. On Monday, Tata Power will
report its earnings. The integrated power company is expected to report a 95.96%
year-on-year jump in consolidated net profit to 3.12 bln rupees for Jan- Mar.
Other Nifty 50 companies that will report their earnings next week are Cipla,
Tech Mahindra, Bajaj Auto, Bosch, GAIL India, Bharat Petroleum Corp Ltd, Oil
& Natural Gas Corp, Power Grid Corp of India and Bharat Heavy Electricals
Ltd.
