Q4 earnings, macro data and Trump's tariff moves to steer market this week
India Inc will start releasing their earnings numbers for March quarter this week.
Among key highlights, the RBI surprised markets by lowering inflation projection and increasing GDP growth forecast in its first bimonthly monetary policy review for FY19. The projected CPI inflation for 2018-19 has been revised to 4.7-5.1 per cent in H1 2018-19 and 4.4 per cent in H2. The GDP growth projection has been strengthened to 7.4 per cent in 2018-19.
This apart, ICICI Securities had a disastrous debut, as its scrip got listed at Rs 435 on the NSE, a 16.35 per cent discount to the issue price of Rs 520. On the BSE, the stock listed at Rs 431.10, down 17.10 per cent.
Going forward, Q4 earnings and global cues will play a dominant role in influencing market.
Let’s check out top six developments to look out for in the week.
India Inc will start releasing March quarter numbers this week. IT major Infosys will declare its March quarter results on Friday. Kotak Securities in its research report said that the fourth quarter will be better for IT companies than the March 2017 quarter. Depreciation of US dollar against other currencies will provide cross-currency tailwind of 60-130 bps and 20-50 bps for margins.
"We expect companies to start off on a conservative note for FY2019E revenue growth guidance. Expect 6-8 per cent c/c revenue growth guidance from Infosys and 8-10 per cent from HCLT with no change in operating margin guidance band. We maintain our constructive view on Infosys and Tech Mahindra," the brokerage said.
VST Industries and Reliance Industrial Infrastructure are slated to announce their numbers on Thursday.
The government will announce industrial production data for February on Thursday. Industrial production growth rose higher than expected to 7.5 per cent in January from 7.1 per cent in the previous month. Inflation data based on consumer price index (CPI) for March 2018 is also slated to release on April 12. The retail inflation dipped to 4.44 per cent in February from 5.1 per cent in the previous month.
Global trade war
Rising trade tensions between the US and China will keep investors on the edge. China's official news agency Xinhua said on Saturday that US "waywardness" in its tit-for-tat tariff exchange will only end in defeat. China's state media has rallied against the United States warning its trade protectionism actions would end in defeat and that the only option now was to hit the United States hard enough so it will "remember the pain," Reuters reported.
China warned on Friday it was ready with a "fierce counter strike" of fresh trade measures if the United States follows through on President Donald Trump's threat to slap tariffs on an additional $100 billion of Chinese goods. On Wednesday, China imposed $3 billion of tariffs on US fruits, nuts, wine and pork, just hours after the Trump administration proposed duties on some 1,300 Chinese industrial, technology, transport and medical products.
Chinese president Xi Jinping is set to address investors at the Boao Forum for Asia on Tuesday -- China’s answer to Davos -- on the tropical island of Hainan.
Lemon Tree Hotels to list on Monday
Hospitality chain Lemon Tree Hotels is slated to list its shares on the bourses on April 9 (Monday). The company's Rs 1,038.68 crore initial public offer (IPO), which was open for subscription from March 26-March 28, was subscribed 1.19 times. The price band of the offer was fixed between Rs 54 and Rs 56 per equity share.
QIB quota was subscribed 3.88 times, while NII and retail categories saw bids at 0.12 times each.
Lemon Tree Hotels offers rooms in three categories. These are Lemon Tree Premier (upper midscale), Lemon Tree Hotels (midscale) and Red Fox (economy segment). The average occupancy of its rooms is 77 per cent.
US jobs growth eased in March. The data released by the US Labor Department showed only 103,000 jobs were added last month. Wall Street economists had expected an increase of about 185,000, according to Bloomberg. The unemployment rate was, however, steady at 4.1 per cent for the sixth straight month. Global stocks are likely to take cue from it when trading resumes on Monday.
This apart, there is speculation that progress will be announced on renegotiations of the North American Free Trade Agreement (NAFTA), when US President Donald Trump, Mexican President Enrique Pena Nieto and Canada Prime Minister Justin Trudeau meet at the Summit of the Americas in Peru at the end of the week, reports CNBC.
What tech charts say about market outlook
The Nifty50 index on Friday formed an indecisive 'Doji' pattern on the daily chart. However, on the weekly chart, it made a bullish candle. Analysts say the index may see immediate resistance at around 10,350 mark, while levels around 10,220 should act as immediate support. Chandan Taparia of Motilal Oswal Securities said the index is making higher highs and higher lows for last three sessions.
As long as the Nifty50 holds above 10,276, it could extend its move towards 10,440.
Milan Vaishnav, CMT, MSTA, says "The 10,390 and 10,495 levels should act as immediate resistance for the Nifty50 in the coming week, while supports are expected at 10,210 and 10,115 levels."