Markets to Be Guided by COVID-19 pandemic, Macro Data, Earnings This Week: Analysts
Market movement this week will be influenced by updates on the COVID-19 front, macroeconomic data announcement, quarterly earnings and global trends, said analysts. They also added that state election results are unlikely to have any major impact on the markets and the major determining factor will be the rising COVID-19 cases and how governments (both central and states) are going to address this health crisis.
The ruling Trinamool Congress was ahead of the BJP in the keenly watched state of West Bengal, while the saffron party-led NDA was leading in Assam and the DMK in Tamil Nadu, according to the latest trends for Assembly polls. In Kerala, the ruling LDF is leading in 88 of the 140 assembly constituencies while the opposition Congress-headed UDF was ahead in 50 segments.
Geojit Financial Services Chief Investment Strategist V K Vijayakumar said, “The election results are unlikely to have any impact on the markets. The news value won’t last more than a few hours. The major determining factor will be the rising COVID-19 cases and how governments (both central and states) are going to address this tragic health crisis.” He added that if the rising COVID-19 case load leads to a major catastrophe and another country-wide lockdown is declared, the market would be hugely impacted. “So, watch out for the COVID-19 counts more than the vote counts.” The counting of votes for the Assembly polls in four states and a Union Territory is being taken up at a time when the country is grappling with a raging COVID-19 pandemic. Religare Broking Vice-President (Research) Ajit Mishra said, “We expect volatility to remain high this week, too. First, participants will react to Reliance Industries results which came in after market hours on Friday. Election results of the 5 states will also be the focus.” He added that on the economy front, manufacturing PMI and services data are scheduled on May 3 and May 5, respectively.
“Needless to say, updates related to COVID-19 cases, vaccine drive and global cues will also be closely tracked. “Earnings season will also gain pace and some big names like Kotak Mahindra Bank, Hero MotoCorp, Tata Steel, Dabur and HDFC will announce their results along with several others,” Mishra said.
Reliance Industries on Friday reported more than doubling of its March quarter net profit as consumer businesses of retail and telecom as well as petrochemicals saw sequential recovery on improved spreads offsetting continued weakness in refining business. Samco Securities Head (Equity Research) Nirali Shah said, “Domestic bourses this week are expected to be influenced by dual factors: Quarterly results and further restrictions on increasing COVID-19 cases.” Adani Ports and Special Economic Zone, Adani Enterprises, CEAT and Adani Power are also among the other important earnings to be announced this week.
Major automobile manufacturers Maruti Suzuki, Hyundai Motor, Tata Motors and Kia on Saturday reported a decline in passenger vehicle sales in April compared to March this year as the second wave of the coronavirus pandemic hit dispatches. However, Mahindra & Mahindra along with Honda Cars India posted sequential growth in their passenger vehicle sales last month.
Last week, the 30-share BSE benchmark gained 903.91 points or 1.88 per cent.