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The benchmark share indices are seen declining further next week but the downside is likely to be limited as the indices have consolidated most of their recent gains. Market will look out for a slew of economic data and events that are likely to lend direction to Indian equities next week. On the global front, investors will eye US' non-farm payrolls data for October, due later yesterday, for clues on the US Federal Reserve's likely action on the monetary stimulus front. Early next week, market will also focus on the outcome of the China's Plenum, where significant reform measures are expected to be announced. The Third Plenum is China Communist Party's meeting over the weekend that will shed light on a new economic framework for the country, which is likely to have a global impact.
Back home, the market is likely to take cues from the Consumer Price Index and Index of Industrial Production for September due on Tuesday and Wholesale Price Index based inflation data for October due on Nov 15. The first phase of polling for assembly elections in Chhattisgarh to be held on Monday is also likely to be in focus. Recent opinion polls suggest that support for the opposition coalition led by the Bharatiya Janta Party (BJP) is strengthening both in these states and nationally. The movement of the rupee against the dollar will also be crucial for the market.
As long as the National Stock Exchange's 50-share Nifty stays above the 6080-mark, a recovery in the market is likely next week. Yesterday, share indices ended down for the fourth straight session due to continued profit booking and weak cues from overseas markets. Nifty ended at 6140.75, down 46.50 points or 0.7%, while the S&P BSE Sensex closed at 20666.15, down 156.62 points or 0.7%. MCX's SX40 closed at 12273.64, down 119.60 points or 0.97%.
Sector-wise, stocks in the financial space are likely to remain under pressure next week due to the rising bond yields and persistent weakness in the rupee. Until the rupee and bond yields stabilise, bank stocks are likely to witness further selling- pressure. Information technology and metal stocks are seen rising further next week, but profit booking is likely to kick-in at higher levels. Pharmaceutical stocks performing well next week as he expects investors to shift positions to defensive bets.
On the earnings front, Tata Motors is likely to open higher on Monday as the company reported a consolidated net profit of 35.42 bln rupees in Jul-Sep. Also, the company's arm Jaguar Land Rover reported robust operating margin for the quarter at 17.8%, higher than the 15-16% estimated by analysts. But profit booking is likely to limit the upside in the stock to 400-410 rupees as the stock has already run-up a lot. The stock closed 1% higher at 384.15 rupees. Stocks of Crompton Greaves will also be in focus as the company reported Jul-Sep consolidated net profit of 584.1 mln rupees, missing analysts' estimate of 780 mln rupees. Jul-Sep earnings of Nifty companies, including Hindalco Industries, Bharat Petroleum Corp, Cipla, State Bank of India, Sun Pharmaceutical Industries, Jaiprakash Associates, Tata Steel and Mahindra & Mahindra will keep their stocks in the spotlight next week.
The benchmark share indices are seen declining further next week but the downside is likely to be limited as the indices have consolidated most of their recent gains. Market will look out for a slew of economic data and events that are likely to lend direction to Indian equities next week. On the global front, investors will eye US' non-farm payrolls data for October, due later yesterday, for clues on the US Federal Reserve's likely action on the monetary stimulus front. Early next week, market will also focus on the outcome of the China's Plenum, where significant reform measures are expected to be announced. The Third Plenum is China Communist Party's meeting over the weekend that will shed light on a new economic framework for the country, which is likely to have a global impact.
Back home, the market is likely to take cues from the Consumer Price Index and Index of Industrial Production for September due on Tuesday and Wholesale Price Index based inflation data for October due on Nov 15. The first phase of polling for assembly elections in Chhattisgarh to be held on Monday is also likely to be in focus. Recent opinion polls suggest that support for the opposition coalition led by the Bharatiya Janta Party (BJP) is strengthening both in these states and nationally. The movement of the rupee against the dollar will also be crucial for the market.
As long as the National Stock Exchange's 50-share Nifty stays above the 6080-mark, a recovery in the market is likely next week. Yesterday, share indices ended down for the fourth straight session due to continued profit booking and weak cues from overseas markets. Nifty ended at 6140.75, down 46.50 points or 0.7%, while the S&P BSE Sensex closed at 20666.15, down 156.62 points or 0.7%. MCX's SX40 closed at 12273.64, down 119.60 points or 0.97%.
Sector-wise, stocks in the financial space are likely to remain under pressure next week due to the rising bond yields and persistent weakness in the rupee. Until the rupee and bond yields stabilise, bank stocks are likely to witness further selling- pressure. Information technology and metal stocks are seen rising further next week, but profit booking is likely to kick-in at higher levels. Pharmaceutical stocks performing well next week as he expects investors to shift positions to defensive bets.
On the earnings front, Tata Motors is likely to open higher on Monday as the company reported a consolidated net profit of 35.42 bln rupees in Jul-Sep. Also, the company's arm Jaguar Land Rover reported robust operating margin for the quarter at 17.8%, higher than the 15-16% estimated by analysts. But profit booking is likely to limit the upside in the stock to 400-410 rupees as the stock has already run-up a lot. The stock closed 1% higher at 384.15 rupees. Stocks of Crompton Greaves will also be in focus as the company reported Jul-Sep consolidated net profit of 584.1 mln rupees, missing analysts' estimate of 780 mln rupees. Jul-Sep earnings of Nifty companies, including Hindalco Industries, Bharat Petroleum Corp, Cipla, State Bank of India, Sun Pharmaceutical Industries, Jaiprakash Associates, Tata Steel and Mahindra & Mahindra will keep their stocks in the spotlight next week.
