Markets this week are expected to remain volatile - Eastern Financiers

After a week of positive performance, markets next week are expected to remain volatile as it continues to track corporate earnings. Apart from earnings, sector specific news flow in the form of Bank loan growth would be crucial as far as Banking stocks are concerned. Also, any further cancellation of coal blocks by the government, which has sent fresh notices to private companies asking them to furnish documents to verify the mining lease and green clearances or face cancellation, would be closely monitored by market participants.

On the Global front, important macro data flows would influence all key markets including ours. Another crucial development on the global front would be the verification of implementation of the Iran Nuclear deal, which comes into effect next week, by IAEA. The US has already warned Iran that if IAEA finds a breach of the treaty then there would be fresh issuance of sanctions, which could cause spike-up in crude price. Hence in this context, the movement of crude prices would play an important role in shaping market trajectory next week. Also, movement in the INR vis-à-vis other international currencies would be having an impact on market performance.

Corporate earnings would hog the limelight as a lot of important large and mid-cap companies comes out with their Q3FY14 performance, next week. Markets would be closely watching out for the guidances given by various managements in terms of FY15 top and bottom-line growth. While the initial trend in corporate earnings has not been too bad and the expectation among investors is that the coming quarters would portray a much better corporate performance, the broader trend would only emerge after this week's result announcements. Some of the important corporates that are scheduled to come out with their third quarter numbers include Aptech Ltd, Tata Metaliks, Uktratech Cements, Asian Paints, Tata Coffee, Kotak Mahindra Bank, Ashok Leyland, Zee Ent., L&T, Raymond, HDFC Ltd, Dabur India, Biocon, Cairn India, Dish TV, Glenmark Pharma, etc.

Banking Loan growth, an important measure for not only the banking sector but the overall health of the economy would also get announced next week. Banks' loan growth moved closer to the Reserve Bank of India's full-year projection of 15% growth in the period from March 22 to November 29. Bank loans grew around 13.8 percent to 76.94 trillion rupees, while deposits rose 11 percent to 58.43 trillion rupees during the period. The Loan growth is expected to continue improving as the economy shows signs of revival, going forward.

Gloabally, there would a lot of important data announcements all through the coming week that would be closely tracked by investors back home as well. Some of the crucial data points include Italian Industrial new orders, Australian CPI, UK Claimant count change, Chinese manufacturing PMI, US existing Home sales, US unemployment, etc.

Source : Equity Bulls

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