Indian Markets Outlook for the week – 25 to 29.05.2015
Jan-Mar
earnings, expiry to be key next week
( www.rupeedesk.in )
With
an action packed week ahead as many Nifty companies are scheduled to release
their Jan-Mar earnings and the US will releases its economic growth data, share
indices are seen moving within a range, but may also witness volatility due to
expiry of May derivatives expiry on Thursday. Data on the US economic growth
for Jan-Mar and housing starts for April will be looked at next week. While the
data from the US may impact the market, its affect will be less than of local
factors.
With
the May derivatives contract expiring on Thursday, the market is likely to be
volatile over the week as traders rollover their positions to the June series. The
Nifty ended up 0.4% at 8458.95 points while S&P BSE Sensex ended at
27957.50 points. Public sector banks are seen weak, especially after State Bank
of India reported its Jan-Mar earnings. In the immediate term banks, especially
public sector banks, will perform poorly as SBI was a
sentimentally
strong result. In the long term we see SBI as a good stock as asset quality
would improve with better macro environment.
State
Bank of India reported a net profit of 37.42 bln rupees for Jan-Mar against
estimates of 36.72 bln rupees. The bank also reported a 70 bps decline in its
gross non-performing assets ratio, with its gross NPAs falling to 567.25 bln
rupees from 619.91 bln rupees as of the end of December. However, the bank sold
45.10 bln rupees of assets to asset restructuring companies, which the equity markets
took as an explanation for the reduction in NPA ratio. Stock prices of the
company declined 2.7% to 282.45 rupees.
Large-cap
information technology stocks are also likely to do well while mid-caps are
seen subdued, due to the steady depreciation in the rupee. Tech Mahindra, Tata
Motors, Bharat Heavy Electricals, Coal India, Hindalco Industries, NMDC, Oil
and Natural Gas Corp, Power Grid Corp of India, Cipla, Mahindra and Mahindra,
Sun Pharmaceutical Industries and Larsen & Toubro are the Nifty companies
reporting their earnings next week. Bosch, which will be included in the Nifty
on May 29 at the expense of IDFC, will be reporting its Jan-Mar earnings on the
same day. Other companies reporting their Jan-Mar earnings next week are
Glenmark Pharmaceuticals, Jindal Steel and Power, ABG Shipyard, Ipca
Laboratories, Bank of India, United Spirits, and United Breweries, among others
